Oral Answers to Questions

CULTURE, MEDIA AND SPORT

The Secretary of State was asked—

Digital Television

Kevin Brennan: What steps she will take to enhance consumer choice for premium channels on digital television.

Kim Howells: The draft Communications Bill and associated documents set out a proposed framework for the regulation of communications, which is intended to broaden choice of and access to modern communication technologies, and to make markets work better. Where there is consumer demand—for example, for premium channels—that should improve choice.

Kevin Brennan: I thank my hon. Friend for that reply. Does he agree that, given the demise of ITV Digital, it is important to ensure that the Government are committed to retaining premium subscription programming on digital terrestrial television? In addition, did he note that the demise of ITV Digital had at least one minor benefit in that it allowed viewers to watch for free the first division play-offs yesterday at Cardiff's magnificent millennium stadium, proving once again that a new Wembley stadium is not needed?

Kim Howells: It was a great game in a magnificent stadium—even though I am from Pontypridd and cannot stand the place.
	It is not for the Government to give those assurances. Indeed, I understand that the administrator will soon be informing customers of their rights. Currently, there are rules to protect the payments made by subscribers since the beginning of administration and the subscriptions have been placed in a specific account. If the customers lose their pay services, relevant pro rata payments, per day, will be given back to them. For the time being, consumers will keep at least all the public services, which constitute 14 channels.

Nick Harvey: What is the Government's attitude to the suggestion that there should be a free-to-air digital terrestrial platform? If that comes about, will they ensure that those who have been able to take subscription channels through ITV Digital in the past are still able to do so as an add-on to that free-to-air service? If another company takes up ITV Digital's multiplex, what confidence can it have that the Government will protect it from the sort of abuse that the Competition Commissioner appeared to consider that Sky had shown towards ITV Digital?

Kim Howells: The Independent Television Commission is responsible for the award of the licences under the Broadcasting Act 1996. In this case, the commission has adopted an accelerated procedure. I understand that potential applicants have to submit to the ITC a confidential expression of interest by 16 May 2002 and full applications by 30 May. It is up to the ITC to give guarantees and assurances or, indeed, to decide under what terms the process will be conducted. The ITC will publish the programme proposals of the applications and will invite representations, which should be received by 6 June. The commission expects to announce the award of licences on 13 June 2002. I very much hope that the hon. Gentleman accepts it is not useful to speculate at this stage. Speculation will be largely groundless until the ITC has made its decisions.

Derek Wyatt: Does the Minister agree that in analogue we have a public sector broadcaster called the BBC, but in digital there is no public sector broadcaster—especially not the BBC? Given the demise of the digital terrestrial platform, does my hon. Friend agree that the BBC should take the senior role in delivering a public service television network on digital terrestrial?

Kim Howells: I know that the BBC is concerned that its new digital services should have a proper platform and good coverage throughout the country, so I am sure it will be interested in determining the outcome. However, I do not intend to speculate from this Dispatch Box on what part the BBC will play.

Tim Yeo: Following the collapse of ITV Digital, does the Minister understand that there is not the remotest chance of achieving digital switchover by the Government's target date of 2010 unless Ministers start to give a stronger lead? Will he therefore publish a timetable setting out how and when the digital terrestrial television signal will be increased, and mount a public information campaign so that consumers are no longer misled into buying equipment that the Government's own plans will make obsolete in a short space of time?

Kim Howells: I am sure that the hon. Gentleman understands that it was his Government who privatised the transmission services. He will also understand that the decision was taken before the Labour Government came into power that the signal for digital services would be interleaved among the existing analogue services. To believe that we can turn up the power shows his ignorance of the technology. He should do as I have done and go to Croydon—[Hon. Members: "Labour Croydon!"]—and talk to the transmitters—[Hon. Members: "Transmitters?"] The hon. Gentleman should go to Labour Croydon and talk to the transmission companies; he would then realise that it is not easy to increase the signal in that way. The signal has already been turned up by 3 decibels, which is a considerable amount. To turn it up further would interfere with analogue signals. Perhaps the hon. Gentleman would like to tell his constituents how wonderful it would be if the great majority of them could not watch analogue on their television sets at home.

Terrestrial Television

Jim Cousins: What her policy is on ownership of terrestrial television channels by media conglomerates.

Tessa Jowell: As my hon. Friend knows, proposals for the reform of media ownership rules were published last week, alongside the draft Communications Bill. Our proposals mean that there will be at least three public service television broadcasters in separate ownership. We are clear that competition rules will be our main policy lever for influencing the ownership of media, but with specific additional rules for the ownership of terrestrial television. Those rules follow from the basic principle that the media, more than any other industry, underpin our democracy and the culture of debates in this country. They will mean that the owners of the largest newspaper groups—those with more than a 20 per cent. share of the national circulation—cannot buy an ITV licence or acquire a large stake in any ITV company. That will prevent a single owner from owning too large a share of the nation's democratic debate. ITV currently has more than a quarter of the share of television viewing, is universally available, and has substantial public service broadcasting obligations.

Jim Cousins: I thank my right hon. Friend for her answer, but she will, of course, appreciate that British terrestrial television has been financially weakened by recent events, that Rupert Murdoch is now the gatekeeper to the digital age, and that her proposals weaken ownership controls and open up British television to those whose tax is paid—if it is paid at all—and whose policy is set from outside the United Kingdom. Under those circumstances, will the power to vary licences be robust enough to protect Britain's cultural identity and the cultural identity of its nations and regions, and will that power be used robustly?

Tessa Jowell: I thank my hon. Friend for that question. It does not matter where a company is based: if it buys into British television, it will be subject to UK regulation, both in relation to the terms of licences and the regulation of content. It is important to be clear about the extent to which content regulation will accompany the great liberalisation and deregulation of the proposals that we published last week: the content board of Ofcom; the general public service remit, which will be held by Ofcom; the definition of public service broadcasting; the definition of the regional character of local services; the nominated news provider; the insistence on adequate funding of Channel 3 news; Ofcom's role in relation to overseeing the local content of local radio services; and Ofcom's role in relation to ensuring the accuracy and impartiality of news. The combination of deregulation will bring new inward investment to the British media industry, but the quintessential nature of British broadcasting will be protected by tough content regulation.

Nicholas Soames: Would the Government be content to see the pornographer and part-time political party financier, Mr. Richard Desmond, own a television station?

Tessa Jowell: As I made perfectly clear a moment or two ago, our rules are proprietor-neutral.

Tim Yeo: Given the wide range of free-to-air and pay television channels now available on terrestrial television, why do we need a special regime to control ownership? Why cannot we simply leave ownership to existing competition law? Is not the maintenance of a special regime merely both confusing and a device for the Government to extract either political favours or financial donations?

Tessa Jowell: Frankly, the hon. Gentleman's final remarks demean him. I hope he will think very carefully about withdrawing them. The proposals are, under any scrutiny, proprietor-neutral. They have the single purpose of opening the British media market to much-needed investment from anywhere in the world, subject to the clear regulation that I set out to the House a few moments ago and last week.
	The hon. Gentleman asks why we do not deregulate even further. We do not intend to deregulate further because—for the reasons that I set out a moment ago—the media are different from other industries. It is critical that we maintain the robustness of our democratic debate. Although competition law alone can certainly promote dispersed ownership and has lowered barriers to entry, there is no guarantee that competition law alone will deliver the degree of plurality on which our democracy depends.

Digital Television

David Amess: What discussions she has had with Carlton and Granada since 26 April on digital television.

Kim Howells: Since 26 April, Ministers and officials in the Department for Culture, Media and Sport have continued our regular contacts with Carlton and Granada, which are members of the ITV network and digital television stakeholders through ITV's interest in the Digital 3 and 4 licence.

David Amess: Is the Minister aware that a hard pressed club such as Southend United stands to face a shortfall of £238,000 over the next two years as a result of the collapse of digital television? Is he further aware that clubs such as Southend United feel that Carlton and Granada have some responsibility in the matter? Will he please clarify the situation and do everything that he can to help Southend United football club even if it means playing for it?

Kim Howells: Did the hon. Gentleman say, "Even if it is painful"?
	My right hon. Friend the Minister for Sport has been very active in trying to broker new arrangements and new talks to ensure that football clubs do not suffer overly as a result of the contracts that they signed with ITV Digital.

Peter Pike: Does my hon. Friend recognise that even a club such as Burnley now faces a £3 million gap in its funding and has had to put all its policies for progress on hold until the position is clarified? Will he not accept that the House should clearly condemn Carlton and Granada? Even if they do not have a legal responsibility, they have a moral responsibility and they should get on and sort out the problems for the sake of football in this country.

Kim Howells: Whatever I may think about the morality or otherwise of the contract that was entered into, it was a commercial contract between two sets of companies. We must treat it as such.

Michael Fabricant: Will the Minister confirm that, under the terms of the draft Communications Bill, Carlton and Granada would be able to combine and form, in effect, one ITV company? Why then is the Minister happy to see a situation whereby another pornographer, Silvio Berlusconi, could be allowed to take over ITV whereas Rupert Murdoch would not be allowed to? Will the Minister not accept that the large penetration of digital television in the United Kingdom has occurred as a direct result of News Corporation and Sky and not of companies such as ITV Digital?

Kim Howells: I do not accept that the situation is vastly different after the publication of the Bill. Silvio Berlusconi could, of course, have made a bid before now. However, the hon. Gentleman has highlighted a basic anomaly in the existing rules, and it is quite proper to remove the rules that preclude someone who is not from the European Union from owning a television station here.

Clive Betts: I am sure that many in football would like to thank my right hon. Friends for the considerable efforts that they have made to sort out the mess of ITV Digital, but ITV Digital has now collapsed, putting at risk the future of many Football League clubs. Does my hon. Friend agree that there must be something wrong when Carlton and Granada—companies that are, on the one hand, joint owners of ITV Digital and, on the other, making millions of pounds from the so-called digital dividend—can walk away from their obligations to 72 Football League clubs and try to pretend that they have nothing at all to do with the matter? Must we not keep the pressure on those companies and tell them that they have a moral obligation and that football generally expects something to be done?

Kim Howells: I understand that both parties have hired expensive lawyers. No doubt the matter will become a question for the courts, and in the end the only people who will make money out of it will be very expensive QCs.

Anne McIntosh: Will the Minister take the opportunity today to assure the House that there will continue to be a viable future for all forms of digital television—terrestrial, cable and satellite—bearing in mind the precarious position in which some of the cable companies find themselves? Will he also clarify precisely the regime that will operate under the new Ofcom, and whether the Office of Fair Trading or Ofcom will be the competition authority? Although the Secretary of State said that the regime will be proprietor-neutral, there will be a reference to the competition authority if a newspaper proprietor expresses interest in owning a share of ITV.

Kim Howells: Sophisticated and well-tested arrangements already exist between sectoral regulators and the Director General of Fair Trading and the OFT. I hope that they can be replicated and improved under Ofcom—indeed, I have every confidence that they will be. The regulator, Ofcom, will judge competition cases in the first instance, but it will operate alongside and in conjunction with the Director General of Fair Trading, who has responsibility for implementing the terms of the Competition Act 1998.

Tourism

Nigel Waterson: If she will make a statement on the prospects for the tourism industry.

Tessa Jowell: Some 2.6 million domestic tourism trips were taken in England over Easter, and visitors spent £400 million. That marks a return to pre-foot and mouth disease levels and is no doubt a cause for celebration on both sides of the House.
	To support that recovery and to advance my programme of modernisation, radical change to the English Tourism Council will be necessary. A new public-private coalition focusing on domestic marketing and e-tourism is now the basis for discussion with the industry. Regional development agencies will in future play a stronger part in the strategic leadership of tourism, and regional tourist boards are the natural delivery partners for the RDAs.
	That is an announcement to the House of progress so far. Further and final findings will be announced in the summer.

Nigel Waterson: Is the Secretary of State aware of the thousands of jobs in towns such as Eastbourne that depend on tourism? Will she explain why it has taken the Government so long to recognise that the English Tourism Council should have a marketing role? When will it get that marketing role? Why is England always the poor relation compared with Scotland, Wales and Northern Ireland?

Tessa Jowell: That is absolutely typical of the Opposition. An announcement of recovery in tourism, which will benefit many businesses in the hon. Gentleman's constituency and the constituencies of hon. Members on both sides of the House, is a cause for celebration. However, so that the recovery can be sustained, I am convinced that the English Tourism Council needs to be overhauled so that it can assume a marketing function on a par with the marketing functions in respect of Scotland, Wales and Northern Ireland. I have announced that decision to the House today, and work will now be started to ensure that the outcome follows.

Bill O'Brien: May I congratulate my right hon. Friend on the work that she is doing to promote tourism throughout the United Kingdom? However, I ask her seriously to consider the facilities that are available for tourists on inland waterways, where there is much potential. There are many who work voluntarily to sustain our waterways. It would be in everyone's interest if my right hon. Friend would give further consideration to support the waterways in the interests of tourism throughout the United Kingdom.

Tessa Jowell: I thank my hon. Friend for the work that he does to promote the interests and the role in tourism of the waterway authorities. My hon. Friend the Minister for Tourism, Film and Broadcasting has had two meetings with the relevant authorities in the United Kingdom, particularly in Scotland. Lottery investment is bringing some of our more neglected waterways back to life, and back to the standard that will make them the tourism attractions that they deserve to be.

David Burnside: I am sure that the Secretary of State, like me, is an avid reader of The Guardian. She will have been saddened by the newspaper's flawed editorial policy this year, which predicted that the royal family was an out-dated organisation and institution. Events—some of them extremely sad, this year—have proved that the royal family is a popular institution, nationally and internationally.
	Is the right hon. Lady able to give the House a progress report from Lord Sterling's Committee? What has been done by the trendy, lefty marketing people in tourism to increase the appeal of the royal family and the jubilee events that are taking place round the United Kingdom? For example, today the Queen is in Northern Ireland. There is great potential for tourism—what is being done about it?

Tessa Jowell: The hon. Gentleman is right to underline the benefits to tourism of the jubilee year. The evidence is that throughout the country, as the Queen said recently, the modest and pragmatic British people will be celebrating the jubilee in their own way.
	The target for the number of beacons committed to be lit over the central weekend was about 500. In 1997, in fact, there were slightly more than 100. This year, 1,500 beacons will be lit. That is a measure of the level of enthusiasm that there is throughout the country for celebrating the jubilee. [Interruption.] I hope that the hon. Member for Mid-Sussex (Mr. Soames) is not, uncustomarily, talking down the efforts of all those who are involved in organising the jubilee, or talking down the celebration that will bring the country together. The jubilee will be an opportunity for people, whether republican, monarchist or nothing in particular, to celebrate in their own way.

Ann Cryer: Will my right hon. Friend's Department consider ways of giving publicity to groups of tourist attractions to promote a particular area, such as Keighley? We have the Brontë parsonage museum, which is wonderful. However, would people travel all the way from London to see only that museum? If they knew that in the same area they would find the Keighley and Worth Valley railway preservation society, a bus museum and East Riddlesden hall, which is owned by the National Trust, and trips on the Leeds-Liverpool canal, they might make it a long weekend.

Tessa Jowell: My hon. Friend has provided some real tasters for those who are planning their jubilee holidays. A further attraction this summer will be the Commonwealth games and the advertising part of the million visitor campaign, which is focused especially on reclaiming visitors from America, who have stayed away since 11 September. We wish to encourage them to join the pageantry and celebration throughout the country, including Keighley, during this jubilee year.

Tim Yeo: The Opposition welcome the overdue recognition that the Government's removal of the marketing role of the English Tourism Council's predecessor was a complete disaster for the industry, exacerbating the damage done by the Government's gross mismanagement of the foot and mouth epidemic, the enormous burden of red tape and regulation inflicted on the industry, and the latest imposition of extra employers' national insurance contributions on many small businesses that can ill afford them. Will the Secretary of State make sure that when that marketing role is restored to the English Tourism Council, it will reflect the views of the industry itself and that, if those conflict with the Government's obsession with a regional agenda, the industry's views will prevail?

Tessa Jowell: I hope that the hon. Gentleman found his monthly rant therapeutic; he had a good one this month. On the structure of the marketing function taken on by the English Tourism Council, it will build very much on the million visitor campaign and operate as a public-private coalition. However, as hon. Members have made clear, a tremendous amount of tourism development, investment and advocacy is done regionally, so it would be ridiculous to cut the regions out of the important role that they play in marketing their regions and bringing visitors to their part of the country.

David Clelland: Does my right hon. Friend agree that the north-east has much to offer tourism, from the beauty and history of Northumberland and Durham and the industrial heritage of Tyne and Wear and Teesside to the cultural renaissance on the banks of the Tyne? Does she agree that prospects for tourism in the north-east would be greatly and deservedly enhanced by the awarding of city of culture 2008 to the Newcastle and Gateshead partnership?

Tessa Jowell: I am greatly looking forward to visiting the north-east and meeting everyone associated with the capital of culture bid. I am assured that it is a strong bid, alongside many other strong bids. The Minister for the Arts and I intend to visit as many of the bidding cities as possible, and certainly all those that are shortlisted. However, my hon. Friend makes an important point about the role of culture in regeneration and the way it builds a sense of regional identity and pride. I pay tribute to the efforts of the north-east in doing just that.

School Sports

David Kidney: If she will ensure that new opportunities fund money contributes to greater community use of school's sports facilities.

Richard Caborn: The facilities funded by the new opportunities fund through new opportunities for PE and sport will be a resource for the whole community. Funding is available through that programme to support the development and promotion of facilities for wider community use.

David Kidney: I thank my right hon. Friend for his answer. Does he agree that the scheme provides a brilliant opportunity for opening up school facilities for community use? Does he agree that the new opportunities fund is right to focus on community use as an important part of the bid criteria? Is he aware that Staffordshire's bid majors on community use of school facilities? Can he let me into a secret and confirm that Staffordshire will be a major beneficiary of the fund?

Richard Caborn: I think that Staffordshire has received just under £6 million. However, my hon. Friend is right; the scheme is an element of the funding needed to start establishing links between schools and communities and to strengthen amateur sports clubs. Some 70 per cent. of young people who leave school and go into the world of work or further and higher education never go back into active sport. We have got to look at structural weaknesses, including facilities, so the Government are investing probably the greatest amount of money for a long time—£0.75 billion, including £580 million in England—to start addressing that problem.

Nick Hawkins: Although I welcome the greater use of school sports facilities by the community, does the Minister share my concern that children spend more than twice as much time watching television or playing computer games as they spend doing sport or physical education? Has the right hon. Gentleman had any recent discussions with his counterparts in the Department for Education and Skills to try to reverse his Government's ridiculous decision to take sport out of the core curriculum for all schoolchildren?

Richard Caborn: The hon. Gentleman might like to know that we have a monthly meeting with colleagues not just from the Department for Education and Skills, but from the Department of Health, the Home Office and the Department for Transport, Local Government and the Regions, to encourage sport, which is a powerful tool for delivering many of the Government's policies. We discuss how we can develop within the education structure—in which there is now massive investment—sports colleges, school sports co-ordinators, sports opportunities in all primary schools, and the commitment to two hours a week of quality physical education or sport for every child throughout their school life. The investment referred to in the question shows the Government's commitment to use sport as a tool to deliver many agendas.

Sydney Chapman: Further to the point made by my hon. Friend the Member for Surrey Heath (Mr. Hawkins), will the Minister confirm that a recent report indicated an increase in the number of overweight and obese children, at a time when primary schools at least are cutting the time devoted to physical education? Is it not, therefore, of the utmost priority not only that school sports facilities should be used more by schools, but that sport should have a higher place on the agenda in the school curriculum?

Richard Caborn: Sport should have a higher place on society's programme, if I may say so. Because of obesity, £2 billion is being lost to our economy, and the cost to the health service is £500 million. I agree with the hon. Gentleman's comments about young people, who are being affected by obesity and diabetes because of lack of physical activity. That is a worrying sign. We are addressing the problem through the new opportunities fund investment of £750 million, through the sports colleges and sports co-ordinators, and right from the primary schools, through the commitment to a minimum of two hours of PE or sport for every child each week throughout their school life.

Huw Irranca-Davies: Does my right hon. Friend recognise the importance of the link identified by the Sports Council for Wales and other bodies between community sports organisations and schools? The time when youngsters move away from physical activity and active sport is when they leave school. The structure of formal clubs working with the schools is vital. What is my right hon. Friend doing to ensure that that is promoted?

Richard Caborn: We certainly recognise the importance of that link. As my hon. Friend knows, my right hon. Friend the Chancellor of the Exchequer announced that the charitable status of amateur sports clubs will be strengthened. If all the clubs apply, that could inject £40 million into them. My right hon. Friend also took cognisance of the representations that had been made and gave amateur clubs certain tax breaks. There is a clear commitment from the Government to strengthen the link between schools, communities and sports clubs. We must address the fundamental weakness in sport, which results in almost 70 per cent. of our young people not going back into active sport once they leave school. Wales gets £48.75 million from the new opportunities fund for facilities in Wales.

Seaside Towns (Marketing)

Gordon Marsden: What proposals she has for including seaside and coastal towns in generic marketing activity by the English Tourism Council.

Kim Howells: The new body that my right hon. Friend the Secretary of State announced a few minutes ago will have a remit to set the strategy for all tourism marketing in England. Seaside and coastal resorts are some of our most important tourist attractions. To communicate our determination to work with local authorities, development agencies and everyone else involved in regeneration, during the coming months I shall visit seaside towns and resorts in the north-west, East Anglia, the north-east, Yorkshire and Humberside, Lincolnshire and the south-west.

Gordon Marsden: Notwithstanding the churlish response of the Opposition Front-Bench spokesman, will my hon. Friend accept that my conversations with those involved in the tourism industry in Blackpool and with others in seaside and coastal resorts show that they warmly welcome the restoration of the marketing role of the English Tourism Council? I also welcome the fact that he, in his inimitable style, intends to do some on-the-spot investigation in such resorts. As he does so, will he take on board the need for the generic marketing of seaside towns to include promoting their use as hubs so that more visitors will stay nights in our seaside towns and see the coastal and rural hinterlands as well?

Kim Howells: I thank my hon. Friend for his question and his great work on behalf of coastal towns and resorts, including Blackpool. He is right to highlight the importance of coastal towns and resorts having a working relationship with their hinterlands. There are now some very good examples of such relationships. I have been especially impressed by the north Devon partnership and by the way in which Bournemouth and the New Forest have been working together to develop new sorts of holidays. Often, these are niche holidays in which people can have a traditional break at a seaside resort, but also go cycling or engage in other activities in the hinterland. That is a good way forward for resorts and their hinterlands.

Julie Kirkbride: We heard a lot of bluster from the Secretary of State today about the creation of the English Tourism Council. Will the Minister show a little humility and explain to the House the reason for the welcome re-creation of the English Tourism Council, which is that the changes made by his Government to the structure of tourism councils in England in the early part of their term in office have been an absolute disaster?

Kim Howells: No, the changes have not been a disaster. The way in which the industry was tested in 2001 certainly showed up weaknesses in the structure of support from public funds. We have taken cognisance of that fact and tried to learn from it. I should have thought that, rather than taking such a churlish approach, the hon. Lady would welcome this development and contribute by suggesting how it could be made even better. That would avoid the yah-boo nonsense that we so often get in the Chamber and help the Government to ensure that the lessons that were learned—or that should have been learned—during 2001 mean that we will come out of what happened with a stronger tourism industry, not a weaker one.

Women's Football

John Grogan: What plans she has to encourage the development of women's football.

Richard Caborn: I am pleased to say that women's football is now the fastest growing sport in England. The development of women's football is the responsibility of the Football Association and a major component of its five-year development strategy. My officials are working very closely with the football authorities and other sporting organisations to raise the profile of women's sports. Probably one of the greatest boosts to women's football has been given by the film "Bend It Like Beckham", which I understand is bringing hundreds of young girls and women into football.

John Grogan: Does my right hon. Friend agree that we should welcome the first ever terrestrial television coverage of the women's FA cup final on BBC 1 last week—even though sadly, on this occasion, the pride of Yorkshire, the Doncaster Belles, were beaten by a London team, Fulham? Does he agree that such coverage, and indeed films such as "Bend It Like Beckham", can only encourage participation in the sport, especially among girls in their teenage years?

Richard Caborn: Absolutely. If I may give a little advertisement, England are playing Germany in a world cup qualifier on 19 May at Selhurst Park. The match will be broadcast on Sky Television, but nevertheless, England are doing extremely well. Our concern about the lack of young people going from school into sport, which I mentioned earlier, is even more pronounced in relation to younger ladies leaving school. Anything that we can do to encourage such participation must be welcome. I hope that the FA will continue its good work and that we can capitalise on the fact that 2 million people have now seen "Bend It Like Beckham".

Andrew MacKay: In welcoming the terrific success of women's football in this country, is it not a great pity that both the women's cup final and the international match will not be played at a national stadium in England? Is it not about time that we realised that Wembley will not work, and instead allowed the Birmingham site to proceed—

Mr. Speaker: Order. The right hon. Gentleman is out of order; those matters do not relate to the question.

Gareth Thomas: Does my right hon. Friend accept that women's football UK-wide, London-wide, and particularly in north-west London, would benefit enormously from a new national stadium, especially one based at Wembley?

Hon. Members: Order.

Mr. Speaker: Order. The hon. Gentleman is also out of order. Hon. Members on both sides are out of order.

UKOK

Hugo Swire: If she will make a statement on the UKOK campaign.

Kim Howells: The British Tourist Authority's £5 million UKOK campaign was launched in January and continues to run in a number of markets. The campaign has been successful in reassuring potential visitors about the safety of travelling to Britain. The BTA is now building on that work with the £40 million "million visitor" campaign.

Hugo Swire: Given that the Government were able quickly to find £5 million for the UKOK campaign, and given that the Minister, in a debate on south-west tourism in Westminster Hall on 1 May, admitted that abandoning the marketing role of the English tourist board had been a mistake, may I suggest that it is not okay to delay funding any further, especially for areas such as the south-west that have suffered so badly in the wake of foot and mouth? Will he give a commitment, as regards the figures that come out at the end of the summer, to do something to redress the imbalance of the £28 million and the £22 million allocated this year to the Scottish tourist board and the Wales tourist board?

Kim Howells: I cannot answer for the Scots and the Welsh—they have their own decision-making powers and can allocate whatever funds they see fit. The hon. Gentleman clearly does not understand devolution. It has occurred, it is there and he had better realise it.
	The British Tourist Authority has done a tremendous job in persuading overseas visitors to come to this country. Last year, there was a big fall-away in numbers of in-bound tourists. This year, so far, there has been a very small decrease in year-on-year terms. The south-west tourist board has done a magnificent job in getting visitors back in. It had a record autumn and has good forward bookings. At the moment everything looks extremely good, and I am very optimistic about the future of tourism.
	I say to the hon. Gentleman, as I said to the hon. Member for Bromsgrove (Miss Kirkbride), that this is not the place to decry the tremendous efforts made by the tourism authorities to recover from the most difficult year that the tourism industry has ever experienced. I hope that he will continue to support the south-west tourist board.

CHURCH COMMISSIONERS

The hon. Member for Middlesbrough, representing the Church Commissioners, was asked—

Archbishopric of Canterbury

Gordon Prentice: What the annual cost was of maintaining the Archbishopric of Canterbury in 2001.

Stuart Bell: Detailed figures on the costs of running the office of Archbishop of Canterbury for 2001 are in preparation. Published figures for 2000 totalled approximately £1.2 million.

Gordon Prentice: A total of £1.2 million. Given the great wealth of the Church of England, is it not a disgrace that the Archbishop of Canterbury, who is retiring this year, will have to get by on a pension of £17,000, and that the 110 bishops in the Church of England—who are all men—will be on £15,000, and the clergy on less than £10,000, when they retire? However, my question is this. What about the vicar of Dibley? What about the women of the cloth, who are consistently discriminated against? Will they get a top-up pension, and if not, why not? Is the Archbishops Council reviewing the matter?

Stuart Bell: My hon. Friend has more time to watch television than I have, and therefore knows more about "The Vicar of Dibley" than I do.
	Out of the total of £1.2 million, the main elements of the archbishop's costs are staffing costs of £800,000 and office costs of £150,000. My hon. Friend referred to the archbishop's imminent retirement, and this would be an appropriate moment for the Church Commissioners to thank him for all the work, seen and unseen, that he has done on behalf of the Church, and to wish him and his wife Eileen a very happy and long retirement.

Patrick Cormack: I echo the hon. Gentleman's words about the archbishop. Does he agree that the archbishop has been incredibly good value for money and that we should look to expanding rather than reducing the budget?

Stuart Bell: I am grateful for the hon. Gentleman's remarks. He will know of the report of Lord Hurd of Westwell, which suggested that the archbishop, as a national and international figure, has less assistance at his disposal than anyone else who serves in a similar capacity. To take up the point of my hon. Friend the Member for Pendle (Mr. Prentice), it is worth considering the matter, perhaps taking inflation into account and making adjustments accordingly.

Simon Hughes: Because it is always less embarrassing to review, change and possibly increase the budget for someone such as an archbishop when the individual is not in post, are there plans for a review before the announcement of the new archbishop's appointment? Now that we know that Dame Elizabeth Butler-Sloss has been appointed to chair the selection panel, what is the timetable and when do we expect an announcement?

Stuart Bell: I anticipated that question and I am happy to say that the Church Commissioners have no role in choosing the archbishop. On the timetable, gossip has it that the selection will take place in late rather than early summer.
	The hon. Gentleman referred to possible talks between the current archbishop and his successor. He will know of the report of Lord Hurd of Westwell, which will be discussed by the archbishop and his successor before the latter takes up his office.

ELECTORAL COMMISSION COMMITTEE

The right hon. Member for Berwick-upon-Tweed, representing the Speaker's Committee on the Electoral Commission, was asked—

State Funding (Political Parties)

Kevin Brennan: What recent discussions he has had with the Electoral Commission on state funding of political parties.

Alan Beith: Mr. Speaker, your Committee has approved the commission's corporate plan for the next five years. It includes provision for making policy development grants to political parties under section 12 of the Political Parties, Elections and Referendums Act 2000. It also includes a commitment to conduct a review of the case for a cap on political donations and the related issue of state funding of political parties.

Kevin Brennan: Given that Short money is state funding of party political activity and that it has increased by 300 per cent. since 1997, is not it time to consider extending the scope of state funding of political parties, especially to overcome the sort of smears made by the Opposition over the weekend? Is not it worth reminding the public that we do not know the source of Conservative party money when it was in office because the information is locked away in files in Smith square, unless it has had Andersen in to shred it?

Alan Beith: The commission monitors the system whereby political donations are recorded and publicised. It continues that work. The hon. Gentleman's wider points recognise that the system has been extended to include policy development funding and incorporate the fact that the commission will look into the matter.

Tony Wright: When we asked the previous Government whether they would refer funding of political parties to the Committee on Standards in Public Life, they routinely refused. When we came to office, we referred the matter to the Committee and we believed that its recommendations, for which we have legislated, provided the transparency that would solve the problem. Transparency has clearly not solved it, and the funding problem remains. Will the right hon. Gentleman ensure that the Electoral Commission gets stuck in and that we have a proper, comprehensive review of funding of political parties?

Alan Beith: Yes.

Elections (People with Disabilities)

Simon Thomas: What training is being provided for electoral officers on ensuring the full participation of people with disabilities in the electoral process.

Alan Beith: The commission will fund the development and provision of training for electoral services staff in Scotland, Wales and Northern Ireland before next year's elections to the Scottish Parliament, the Northern Ireland Assembly and the National Assembly for Wales. The training programme is expected to deal with methods of ensuring access for people with disabilities to the electoral process. Later this year, the commission will also publish a series a good practice handbooks, which include advice on the matter.

Simon Thomas: I thank the right hon. Gentleman for that reply and emphasise that it is welcome that the commission is taking the issue seriously and engaging in training before the elections in Wales and Scotland. What lessons have been learned from the English local elections? Did postal voting encourage more disabled people to participate? What elements of training to encourage people with disabilities to take up alternative ways of voting do the commission propose?

Alan Beith: I hope that information on this will emerge from the evaluation that the commission is carrying out into the various experiments and pilots that were conducted at the local elections. I know that the commission is keen to work with organisations such as Scope, the Royal National Institute for the Blind and the Disability Rights Commission to develop policies in this area, and to identify the issues that need to be tackled.

CHURCH COMMISSIONERS

The hon. Member for Middlesbrough, representing the Church Commissioners, was asked—

Bishops

Michael Fabricant: If he will make a statement on the work of the archbishops' review group on bishops' needs and resources.

Stuart Bell: The archbishops' review group published a report last year, "Resourcing Bishops", which the archbishops commended for reflection and debate. It concluded that the range of resources made available to bishops is broadly right, but recommended changes in how they are provided.

Michael Fabricant: I have the document here, and it is interesting to note that its foreword states:
	"Readers will find that the report reveals no financial scandal, no profligate waste".
	That makes a pleasant change.
	The hon. Gentleman will be aware of the burden on archbishops, and in particular of the worldwide role of the Archbishop of Canterbury. What further consideration is being given to the future of the archbishops of the United Kingdom? The hon. Gentleman will know that in the eighth century, there was a third archbishopric, based in Lichfield. There needs to be more than one archbishop based in the United Kingdom while another spends much of his time looking after the interests of the Anglican dioceses abroad. May I remind the hon. Gentleman that, if there is to be a third archbishopric, there is a precedent, and it is Lichfield?

Stuart Bell: There was a television catch phrase years ago, "Give us a job!", and that might apply to the bishopric to which the hon. Gentleman refers. I am grateful to him for pointing out that the report states that there is neither waste nor profligacy in the Church Commissioners' books or in the Church of England. He will also be aware that Lord Hurd of Westwell's report on the work of the Archbishop of Canterbury found that the archbishop had no fewer than six major national and international roles. Lord Hurd made a number of recommendations on archbishoprics. He did not recommend a third archbishopric, but I shall be glad to add my own tuppence on that.

Ordination (Church of England)

Chris Bryant: How many (a) men and (b) women the Church of England has ordained in the last year.

Stuart Bell: Two hundred and eighty two men and 214 women were ordained as deacons during 2001.

Chris Bryant: Is the hon. Gentleman aware that, last year, one third of the curates employed by the Church were women, that one in 20 vicars were women and that only one in 110 archdeacons were women? When does he think that the Church of England will manage to achieve parity between men and women in its employment practices, and when does he expect the first female Archbishop of Canterbury to be appointed?

Stuart Bell: As I have already said, the choice of the future Archbishop is not—God be praised—in the gift of the Church Commissioners. On my hon. Friend's important wider point, the gender of candidates is not an issue when they are considered for ordination. However, the Priests (Ordination of Women) Measure 1993 contains provisions for those in the Church of England who have objections on the grounds of theology and conscience to accepting the priestly ministry of women.

Spending Plans

Sydney Chapman: If he will make a statement on the Church Commissioners' spending plans for 2002 to 2004.

Stuart Bell: As a result of the commissioners' good long-term investment performance, they have been able to increase the level of their ongoing non-pension support for the Church's work to £60 million in 2002, rising to £63 million in 2004. This includes an additional one-off commitment of £10 million to parish ministry and mission over the period in question.

Sydney Chapman: Does the hon. Gentleman agree that proper asset management is crucial if the Church Commissioners are to meet the Church's needs? In spite of the figures that he has just given, will he confirm that the commissioners propose to allocate £160 million a year over the next three years, more than 60 per cent. of which will go to meet clergy and widows' pensions?

Stuart Bell: I confirm the points made by the hon. Gentleman, and I am grateful to him for allowing me to say that the administration of the Church Commissioners is in excellent hands, and has achieved an excellent record over many years. He will be aware that the needs of today's Church are great indeed, and demand greater flexibility in the use of the commissioners' funds. We are grateful for his question. There will be flexibility in the allocation of our funds, and we also take into account the need to pay the clergy and to pay the pensions.

PUBLIC ACCOUNTS COMMISSION

The Chairman of the Public Accounts Commission was asked—

Public-Private Partnerships

Gordon Marsden: What assessment he has made of the resources the National Audit Office would need to enable it to conduct pre-contractual analysis of PPP proposals.

Alan Williams: In the past four years, the NAO has reported on the value for money achieved by more than 25 public-private partnership projects. The resources made available to the NAO will continue to include provision to enable it to continue its work in that important area, but the NAO does not envisage conducting pre-contractual analysis of PPP proposals. That would involve it in departmental decision-making processes and compromise its independence.

Gordon Marsden: I thank my right hon. Friend for that reply, but it is a pity that the NAO is not prepared to reconsider, not least in view of the welcome statement of the future head of the civil service on openness in that area. Does my right hon. Friend think that there would be value in the NAO being involved in that ongoing monitoring with the civil service? That might, on occasion, enable doors to be shut before rather than after the horse has bolted?

Alan Williams: That view is based on a misunderstanding of the NAO's role. The NAO's independent status is guaranteed by its non-involvement in policy. If it were to be involved in policy, that would be against its remit and would deprive it of its impartiality in carrying out its audit and value for money functions. Statutorily, the NAO is not allowed to do what my hon. Friend asks.

David Rendel: Although the NAO will not look into bodies such as those mentioned by the hon. Member for Blackpool, South (Mr. Marsden), extra-Executive agencies and non-departmental public bodies will have to be audited by it. What further resources will the NAO have for that?

Alan Williams: In fact, as a result of the Government accepting the Sharman committee report, which makes all quangos susceptible to NAO audit, I have invited the NAO to submit a supplementary programme to me for us to consider in June or July so that we can increase the monitoring of quangos and Government companies.

Potters Bar Derailment

Stephen Byers: With permission, Mr. Speaker, I should like to make a statement about the tragic rail derailment at Potters Bar on Friday 10 May, when coaches of the West Anglia Great Northern 12.45 train from London King's Cross to King's Lynn came away from the tracks immediately to the south of Potters Bar station when travelling between 80 and 90 mph.
	I understand from the police that the train was carrying about 150 people. Seven were killed as a result of the derailment, and about 40 injured. Two remain on the critical list. At a time like this, our thoughts must be with the families and close friends of those who lost their lives. I am sure that the whole House will join me in expressing our condolences to the bereaved and in wishing a speedy recovery to those who were injured.
	Once again, the bravery, courage and professionalism demonstrated by our emergency services—fire, police, medical and health and safety staff—were outstanding. The reaction of the emergency services and the railway staff concerned was the product of constant training and planning, enabling them to perform in a way that the whole nation can be proud of.
	His Royal Highness the Prince of Wales visited the injured and staff in Barnet and Chase Farm hospitals on Saturday, and I know that my right hon. Friend the Secretary of State for Health is visiting the same hospitals this afternoon. I am grateful that the local Member—the hon. Member for Hertsmere (Mr. Clappison)—was able to join me when I visited the scene on Saturday. We also visited the local fire station to thank members of the fire service who attended the crash.
	Potters Bar station is in the centre of the town, and a notable feature of this appalling event is the reaction of local people who came rushing to aid those involved in the crash. In the midst of horror, their selfless behaviour, care and compassion were remarkable. The people of Potters Bar can take pride in their response. I am sure that the House will wish to join me in paying tribute to them all.
	The investigation into the cause of the crash began immediately. British Transport police and Hertfordshire police are working in partnership with Her Majesty's railway inspectorate from the Health and Safety Executive. Early indications are that a set of points south of the station were the cause of the derailment.
	The railways inspectorate believes that the points in question moved as the rear of the third carriage of the train passed over them, and as a result deflected the fourth and final carriage towards the left. That happened because nuts on two stretcher bars were detached. The locking bar connecting the tips of the points was then subject to forces normally shared by the stretchers, and it broke. The rear carriage derailed and slewed sideways, detaching from the rest of the train. It skidded along the track, passing over a bridge and came to rest on its side, wedged under the station canopy. The rear bogie was torn off by the collision with the bridge superstructure, and came to rest on the down slow line, causing severe damage.
	The investigation is now pursuing the question of the circumstances surrounding the nuts being detached from the two stretcher bars, causing the points to fail. The nuts that were detached have now been removed for forensic investigation, and a major portion of the points is also being removed for examination by the Health and Safety Executive.
	The HSE will publish its interim report in the next few days, and we must await its findings. That interim report will be made public. In addition, I can inform the House that, exercising powers under section 14(2)(a) of the Health and Safety at Work, etc. Act 1974, the chairman of the Health and Safety Commission will tomorrow recommend that the commission direct the Health and Safety Executive to conduct an immediate formal investigation into the circumstances of the train derailment. A report will be made public as soon as possible. The Health and Safety Executive intends to announce further details of the scope and arrangements of the investigation in due course.
	Railtrack acted quickly to inspect 800 sets of points across the country and found no similar defects. Her Majesty's railway inspectorate has since examined other points in the Potters Bar area. It, too, has found no similar defects. I have been advised by the railway inspectorate that there are no indications so far of any problem that would require speed or other restrictions elsewhere on the network.
	Railtrack's chief executive told me this morning that, although the company's initial investigation had led it to believe that the points in question had been replaced in December, it now knows that to be incorrect. Railtrack now confirms that the points are in fact about eight years old. It has also informed me that the normal lifespan of a set of points on this type of track is between 20 and 25 years.
	Gauge corner cracking had been identified on rails in the vicinity in September 2001, and as a result a temporary speed restriction had been put in place until grinding to treat the gauge corner cracking had been completed. The speed restriction was lifted on 24 December. Neither Railtrack nor the Health and Safety Executive has any reason to believe at present that gauge corner cracking is linked to the causes of this accident.
	The response to this incident by the emergency services, the industry and the railway inspectorate has been marked by the closest possible co-operation between all concerned. That co-operation continues as the focus shifts to recovery of services and investigation of the points failure. It is clearly essential that the on-site investigation be undertaken as quickly as possible, provided that it is concluded with complete thoroughness.
	Clearance of the site has begun. Once the investigation of the site has been completed—it is hoped that that can be done over the next few days—it can be handed over to Railtrack for repairs to be completed. At this stage, it is impossible to say precisely when the entire site will be returned to normal use, but in the meantime the train operators are putting in place alternative services. The rest of the network is unaffected.
	In this tragic incident, lives have been lost, and we must not forget those who survived but who will be mentally and physically scarred for the rest of their lives. That is why it is vital that we discover not just what happened at Potters Bar but how it happened. We owe a responsibility to all involved in the Potters Bar derailment— a responsibility to identify exactly what took place and then to take the necessary steps in response. That is a responsibility that we will discharge.

Theresa May: I thank the Secretary of State for his statement. On behalf of the official Opposition, I join him in sending my deepest sympathy to all the relatives of those who died in the train crash at Potters Bar. We also send our best wishes for a speedy and full recovery to all those who were injured.
	We are united across the House in our shock and sorrow at what has happened. Lives have been shattered by the crash, and we in the House owe people our commitment to ensure as best we can that an accident of this nature does not happen again. My hon. Friends the Members for Hertsmere (Mr. Clappison), whose constituency covers Potters Bar, and for Brentwood and Ongar (Mr. Pickles) visited the crash site on Friday hours after the accident. They have told me of the extraordinary commitment and hard work of those in the emergency services called to the site.
	Yesterday, I visited the crash site myself. Among those I spoke to were two members of the crew of one of the first ambulances on the scene. They described to me what they had faced. Terrible though the scene had been, they had a job to do and they did it. Their dedication and professionalism shone through, as it did from all those in the emergency services to whom I spoke. We owe our emergency services a great debt of gratitude for all that they did and continue to do to respond to the crash. Our thanks must also go to those in the national health service who are caring for the injured; as the Secretary of State said, to the members of the local Potters Bar community, who rushed to the scene to help; and to those who are continuing to provide support locally as work on the site continues.
	I was also struck yesterday by the meticulous way in which the British Transport police and the Health and Safety Executive were carrying out their investigation. It is essential that we find out exactly what caused the crash, so that any necessary lessons may be learned and action taken to ensure the safety of our rail network.
	Many people who travel by train day in and day out will understandably be concerned about the safety of the network. Will the Secretary of State confirm that, despite the appalling tragedy that occurred at Potters Bar and the other rail tragedies of the past few years, compared with other forms of transport, our railways are still safe—and indeed that safety has been steadily improving?
	The Secretary of State is reported as describing the accident as a one-off, isolated incident. That implies that there are no lessons to be learned from the accident, yet all the reported possible causes of the loosening of the holding nuts on the points—vandalism, sabotage or poor maintenance—would suggest that there are lessons that should be learned, and that describing the accident as a one-off event before the right hon. Gentleman was in receipt of the report from the Health and Safety Executive was premature. Will he confirm that if this proves to be more than a freak accident from which there are absolutely no lessons to be learned, a public inquiry will be set up?
	In the Secretary of State's statement, he reported that 800 sets of points across the whole network had been inspected following the accident. What form of inspection was undertaken on those points? Was it the same type of inspection as took place the day before the accident on the points at Potters Bar?
	Is the Secretary of State aware of local concern about security at Potters Bar station, which led to a meeting between the train operating company, the local police, British Transport police and local representatives in late April?
	Finally, I do not want to pursue this line of questioning too far—I am sure the Secretary of State will appreciate why—but is it true that the cause of the accident lay not just in an act of omission, in removing holding nuts from bolts, but in an act of commission, in tightening one of the bars on the points, thus making an accident more likely? Given the record of vandalism on points across the country and their vulnerability to sabotage, does he still stand by his statement that this is a one-off, unique event from which there are no lessons to be learned? Will he assure the House that, given the possible cause of this accident, regular and additional inspection of points will be made?
	This was an appalling tragedy and our thoughts and prayers remain with the bereaved and injured. I can assure the Secretary of State that the Opposition stand ready to support the Government in taking the actions necessary to ensuring the safety of our rail network.

Stephen Byers: I welcome the fact that the hon. Member for Maidenhead (Mrs. May) recognises that the House is united in our response to the tragedy and to the individuals involved, their families and the community of Potters Bar.
	I should put the record straight right at the beginning. Whether deliberately or inadvertently, the hon. Lady has misquoted what I said. At no stage have I said that there are no lessons to be learned. I said clearly on Saturday that there is a difference between what might be a one-off incident and a generic problem with the railway network. That is an important distinction to make.
	In the light of the briefing that I had before I made any public comments—this is now being confirmed publicly—I said that there were certain events and actions that had taken place in relation to the set of points that meant that we could look at the incident in isolation from the rest of the railway network. That point is important, because we know from Hatfield that sometimes there can be generic problems affecting the railway network that have to be dealt with.
	For the record, at no time have I said that there are no lessons to be learned; there are lessons that can be learned from any accident. Safety is so good—whether on our railways or elsewhere—because we learn from the accidents that happen, just as I am sure we will learn from this incident.
	The hon. Lady raises a number of specific points. On the question of a public inquiry, at the moment the right way forward is to consider the outcome of the investigations that are now taking place, particularly the formal investigation that will be commenced tomorrow by the Health and Safety Executive. We should await the outcome of the investigations before deciding whether or not a public inquiry is appropriate. That is the right step to take.
	In terms of the checks made of the 800 points and whether they were checked in the same way as in previous inspections that may have taken place of the set of points in question, for reasons the House will understand it would be inappropriate for me to comment on what inspections may or may not have been made of those points. I do know that the work carried out by Railtrack on the 800 points has not identified similar defects. The railway inspectorate has audited the work carried out by Railtrack. It has not done so on all 800 points yet, but it is in the process of making sure that the procedures we used were appropriate in the circumstances.
	Security at the station, and whether this was an act of omission or commission are, rightly, matters for the investigations themselves and I would not want to pre-empt their outcome. On the question of safety on our railways, it is difficult in the immediate aftermath of an incident such as the derailment at Potters Bar to say, "Our railways are safe." We get criticised in newspapers if we say that. But if one looks at the long-term trend, it is true that, per passenger-mile travelled, railway travel is getting safer. The facts bear that out and I am pleased that the hon. Lady recognises that.
	One reason why railway travel is getting safer—this is an important point—is that we learn lessons from incidents—whether Hatfield, Ladbroke Grove, Southall, Clapham or Potters Bar. Lessons will be learned and the appropriate changes will be put in place. We owe that to the people involved in the incident at Potters Bar, and that is what we will do.

Anne Campbell: While adding my deepest sympathy to the family and friends of all who died, I wish to mention in particular a young student, Jonael Schickler—a PhD student at Queen's college in my constituency—who, tragically, was one of those who died on Friday.
	In endorsing my right hon. Friend's comments on the valuable work done by the emergency services, I commend the action of the train driver, Andy Gibson, who went beyond the call of duty in helping those who were trapped and injured. Does my right hon. Friend agree that, at this sensitive time, it is particularly important that we, as Members of this House, continue to support the rail industry? I travel on the line in question twice weekly, and I shall continue to do so.

Stephen Byers: I agree with my hon. Friend. It is a tragedy when anybody loses their life, particularly someone who—like the student she mentioned—had their whole future ahead of them. She is right to commend the action of the train driver, Andy Gibson, who gave immediate assistance to those injured, and to point out that we should support the rail network. Like her, I have travelled on that line many times, when visiting friends in Cambridge. A personal knowledge of the service in question brings home the difficulties that can be created. We need to acknowledge that point—I, too, travelled by train on Saturday—but we must recognise that our railway network provides one of the safest forms of travel. We must not be complacent, however, but vigilant to ensure that we retain that position.

Tom Brake: I echo the condolences expressed by the Secretary of State and the hon. Member for Maidenhead (Mrs. May) to the families affected, and their supportive statements about the emergency services. The Secretary of State said that this is a one-off incident, but we need to await the Health and Safety Executive's comments. What is clear, however, is that signals were apparently not involved. I wonder whether he is considering reviewing the use of SPADs—signals passed at danger—as the key safety performance indicator.
	If this incident is shown to be linked to the management of contractors—a key concern in the leaked, overdue Hatfield report, and in the Cullen report—or to contractors' ability to obtain the necessary skilled staff, or to the inconsistent safety standards that the Cullen report also highlighted, would the Secretary of State agree that the incident perhaps constitutes not a one-off, but one of several such incidents? Will the Secretary of State confirm when he intends to introduce safety legislation to deal with such issues, and will he use that as an opportunity to update the House on the progress that is being made on the different recommendations emerging from the Hatfield report, Lord Cullen's inquiry, and Professor Uff's inquiry?
	Finally, does the Secretary of State now have confidence in the information provided to him by Railtrack concerning this particular set of points? He said that gauge corner cracking was present in the vicinity of the relevant section of track, but can he confirm whether it was present on that particular section?

Stephen Byers: The hon. Gentleman raises several points. In terms of judging safety, SPADs have been regarded as effective, but I am always open to suggestions on the ways in which safety might be improved. An important part of learning lessons on improving safety is always to reflect on what might offer the best performance indicator.
	The hon. Gentleman also mentioned concerns about contractors. Without expressing a view on what the investigation may reveal in this case, I agree with him that the Cullen report made some clear recommendations about contractors, and I am concerned that not enough progress is being made on their implementation. On 1 May, I wrote to the chairman of the Health and Safety Commission, asking him to report to me by the end of May on the progress made on Cullen's recommendations—a point that I reinforced when I met him this morning. This is a crucial issue, irrespective of what the investigations into this case might discover. Progress must be made on the Cullen report's recommendations.
	We regard the safety Bill as a priority, but I cannot pre-empt what might appear in the Queen's Speech later this year. The hon. Gentleman raised specific points about whether gauge corner cracking was present on that particular site. I refer him back to my statement, because that contained the latest information that I received from Railtrack, just 40 minutes before I came into the Chamber. It said that gauge corner cracking had been identified on rails in the vicinity in September 2001. I will be more than happy to inform the hon. Gentleman, the hon. Member for Maidenhead and other right hon. and hon. Members about the exact location of gauge corner cracking when I receive further information, but neither Railtrack nor the railway inspectorate believes that it was a factor in the incident.

Gwyneth Dunwoody: My right hon. Friend will be aware that this latest dreadful accident has shaken the confidence of the public in what is manifestly a safe rail system. It therefore behoves the House of Commons to ensure that we take urgent action to restore that confidence. Is he prepared to call together Railtrack, the companies, the Health and Safety Executive and the railway inspectorate to ensure that the whole system of employment of contractors is looked at urgently, because there have been constant rumours about the time taken to obtain classification and qualifications, as well as about the employment of unskilled labour? If the rail system is to be returned to its proper safety level, the public demand is for clear accountability. We should no longer have to wait for reports from accident inspectors, and from those concerned with day-to-day maintenance of safety on the railways, before urgent action is taken.

Stephen Byers: I understand the concerns expressed by my hon. Friend and her Select Committee has drawn our attention to those points in relation to the maintenance of the railway network. There are real concerns about the use of contractors and, in some cases, sub-contracted labour. We do not know the particular circumstances in relation to Potters Bar, but I have just been handed a letter that has been faxed to me by the company secretary of Jarvis, a Mr. Mason, in which he says that all the inspections of those particular points
	"were carried out by Jarvis employees. No sub contract labour was involved. Each of the Jarvis staff involved is fully experienced and qualified and holds all requisite training certification."
	Clearly, the matter will need to be investigated, but that is a direct quotation from a letter that I have just received from the company secretary of Jarvis.
	Irrespective of the outcome of the investigations and what happened in this case, Cullen identified an issue in relation to the use of contract staff. As I say, I have asked the chair of the Health and Safety Commission to report to me by the end of this month on procedures that he will put in place with the industry. I met him this morning and reinforced that point. Genuine concerns exist and must be addressed, irrespective of the outcome of the investigations of this derailment.

James Clappison: I thank the Secretary of State for his invitation on Saturday and for the co-operation of his office. As the Member of Parliament most directly affected, I join him in extending condolences to all those who have lost loved ones in the accident. Our thoughts must be with them at this time.
	I also join the Secretary of State in the tribute he paid to the railway staff, including those stationed at Potters Bar railway station, and to the emergency services—the Hertfordshire police, ambulance and fire services, as well as other members of the services—who attended so promptly and skilfully, and so professionally. Their skill has been commended by all who witnessed the terrible sights at Potters Bar. I also join in his tribute to the members of the public who helped in the moments immediately after the accident. People in the vicinity of the station, on the platform and in local shops and businesses did everything they could to help. The emergency services were also supported and helped by members of the local voluntary services.
	Will the Secretary of State bear it in mind that, in the midst of their sorrow, people in Potters Bar and other users of that extremely busy line are naturally concerned that this tragic incident took place close to the site of another tragic incident at Hatfield? They now want a high degree of reassurance. Does the Secretary of State agree that such reassurance can best be provided by the fullest possible answers to the questions how and why that tragic incident came about? It has left my constituents with the sorry spectacle of that carriage lodged in the middle of their railway station after it had travelled down the platform. My constituents never want to see such a sight again—in Potters Bar or anywhere else—and hope that every possible lesson can be learned from this incident.

Stephen Byers: Once again, may I say how grateful I was that the hon. Gentleman was able to join me in both visiting the scene on Saturday and meeting members of the local fire service who carried out such heroic work? We were both amazed at the modesty of individual firemen, who saw such work as part of their job. Having seen the scale of what happened, it is a remarkable compliment to them that they see such work as part of what they do. The hon. Gentleman is also right to point out the important role of the voluntary services in such situations.
	I fully understand the concerns felt by people in Potters Bar, which is just a few miles south of Hatfield. The situation is different, however; Hatfield was a generic problem as regards the network. All the information available thus far is that that is not the case on this occasion.
	The hon. Gentleman is right to point out that people will want answers to the question: how did this occur? It is now becoming clear how the incident occurred, but we do not know why. The investigation will now have to focus on that aspect. The hon. Gentleman is also right to point out that if we are to regain the confidence of the travelling public, they will want answers to those clear and appropriate questions.

Dennis Skinner: Is my right hon. Friend aware that there has been universal acclaim on both sides of the House for the efforts of those public services, in Potters Bar and elsewhere, that managed to save lives and help the families of those who lost people in that horrific accident? Is not it time—especially after this Secretary of State's action on Railtrack, which caused fury among the Opposition—that there were more people in the public services? That would be wonderful. As a start, perhaps when the inquiry has been held, the Secretary of State might consider taking over the infrastructure of Railtrack and all the rest of it—together with the maintenance—and getting rid of Jarvis and all the subcontractors, who, without doubt, probably played a part in the matter.

Stephen Byers: My hon. Friend is right to express the support shared by all Members for the way in which, once again, the emergency services and the public services more generally, discharged their responsibilities on Friday and during the weekend in relation to the accident at Potters Bar.
	The whole question of the industry's infrastructure and its safety was addressed by Lord Cullen's second report. The Government have accepted all those recommendations and we are now seeing their implementation. That will mean changes in the way in which safety is dealt with in the industry. In my view, that will make real improvements, but it is paramount that there is speedy implementation of all those recommendations, including those about the use of contractors. The best way forward is to consider in the round the proposals that came out of Cullen two and ensure their speedy implementation.

Sydney Chapman: The Secretary of State has referred to the fact that the accident took place just outside my constituency in that of my hon. Friend the Member for Hertsmere (Mr. Clappison) but that a number of the seriously injured were sent to Barnet general hospital, Chase Farm hospital and two other hospitals. Is the right hon. Gentleman aware that after news of the accident broke, an accident and emergency unit—which had undertaken many practices—was immediately activated and that the response, not only between the emergency services but within each service, was magnificent.
	The incident took place near a county boundary and I refer to the co-operation between two ambulance trusts, between the Hertfordshire police and the Metropolitan police, and between local hospitals in Barnet and the nationally renowned neurosurgical unit at the Royal Free. Will he accept that, to local people, the community response was magnificent? We are particularly grateful that the Prince of Wales visited Barnet general and Chase Farm hospitals on Saturday morning, and that the Secretary of State for Health completed a visit to those two hospitals today.

Stephen Byers: The way in which emergency procedures went into place on Friday is a real commendation to those who have been planning for the worst. We saw on Friday how effective they were at putting in place those procedures. There are always concerns, when people are working across boundaries, that bureaucratic layers will get in the way of response. What is notable about Friday, however, is that that did not happen at all. People put aside all those constraints and got on with the job, irrespective of boundaries or budgets. That is exactly how it should be.
	I join the hon. Gentleman in thanking the Prince of Wales for his visit on Saturday, which was a great boost to the injured and to the staff in the two hospitals—Barnet general and Chase Farm. He is also right to say that the Royal Free, which we have not mentioned and which is my local hospital, played an important role with some of the most seriously injured people. I am sure that we are all praying that those people who are fighting for their lives are successful in doing so.
	There are lessons to be learned, and part of that is the way in which emergency services can act in a co-ordinated and responsive way. They did themselves proud on Friday, and we all owe them a debt of gratitude.

Lawrie Quinn: Will my right hon. Friend confirm whether, in his earlier meeting with representatives from the railway inspectorate and the Health and Safety Executive, they indicated that any investigation into the tragedy at Potters Bar would include not only a review of the methodology and frequency of track inspections, which are varied and many, but a review and an audit of enforcement action that may result from such track investigations? That point will be of great interest to those who want to say that they still have full confidence in our railway industry.

Stephen Byers: My hon. Friend has a wealth of experience in these areas from his occupation before he was elected to the House. In my meeting with the railway inspectorate and the Health and Safety Executive, it was made clear to me that there will be a thorough and full investigation. Such an investigation will want to take into account all those relevant matters in relation to what happened at the point south of Potters Bar, and that is appropriate in the circumstances.

Oliver Heald: Will the Secretary of State accept that, in my constituency, which has five stations on the affected line and thousands of commuters, there is deep concern about this crash? May I express my and my constituents' condolences to the families of the bereaved and our best wishes to those who are seeking to recover in hospital at present? Does the Secretary of State understand that, after Hatfield, my constituents endured many months of delays on the line caused by speed restrictions and engineering works? It was thought that that was to ensure that there would not be another significant crash. Yet, months later, we face this dreadful crash. Does he understand that there is a need for great reassurance among my constituents about the safety of this line in the future? What reassurance can he give them today, based on the briefings that he has had?

Stephen Byers: I fully understand the concerns of the hon. Gentleman's constituents. It is an absolutely natural reaction to what happened on Friday. As I said in my statement, Railtrack has checked about 800 points and they have not been found to have similar defects. The railway inspectorate has specifically looked at points near to those at Potters Bar to check whether there was a particular problem with maintenance there and it has not identified any similar defects. The fact that the railway inspectorate has not imposed any speed restrictions as a result of this accident is a clear indication that it, as the independent safety expert, believes the network to be safe. I think that we are looking at a particular set of circumstances affecting a particular set of points. If the investigation shows that that is the case, we need to find out the reason for what happened. However, that is something for the investigation and we will have to await the reports and recommendations that we receive as a result of the inquiries and investigations that are now taking place.

John McDonnell: Will my right hon. Friend secure the publication of the representations that the railway trade unions have made over the past year to Railtrack, the Health and Safety Executive, his Department and the railway inspectorate about the safety of track generally? Will he review the mechanism by which the views on safety issues of workers within the industry are heard and listened to?

Stephen Byers: The views of the trade unions and those with day-to-day experience of the network are important and need to be taken into account. Although I do not wish to draw conclusions about this incident, such people are often able to identify quickly and at first hand any particular problems or deficiencies that might exist. A sensible procedure needs to be put in place whereby individual employees can raise concerns with their employer and with the industry. I would have thought that that would be one of the issues that will need to be considered in the light of the investigations that are taking place.

Andrew Lansley: The Secretary of State will be aware that my constituents were among those killed and injured in this terrible tragedy. I wish to take this opportunity to express on behalf of my constituents our condolences to those who suffered bereavement and our deepest sympathy to those who were injured and to their families. Along with other Members of the House, I also wish to express our appreciation to the emergency services, the hospital services and the people of Potters Bar for the support and help that they gave in tending to the injured.
	As my hon. Friends the Members for Hertsmere (Mr. Clappison) and for North-East Hertfordshire (Mr. Heald) have said, there is a sense of shock among those who use this railway line regularly. They suffered lengthy delays after the Hatfield crash and they thought that they were doing so in pursuance of a safer railway. Notwithstanding the outcome of the investigation into this incident, is it not right that an account is given to them of how safety has been secured on this line and how it will be maintained in the future? There should be the fullest possible disclosure of all relevant information about the safety features of this railway.

Stephen Byers: I agree with the hon. Gentleman. I fully understand the shock that must be felt by his constituents and all those who use the line regularly given that the incident took place so close to the one in Hatfield. He is right to say that people need to account for what happened. I have made it clear since Friday—over the weekend and, indeed, again today—that all the relevant parties will have to make a full disclosure of exactly what happened and about the issues for which they have responsibility. Confidence will be re-established only if people receive a proper and coherent explanation of exactly what took place. All the bodies involved recognise the importance for the industry of doing precisely that. There is now probably a greater acknowledgment in the railway industry that, if it is to secure the confidence of the travelling public, openness and transparency will be key factors.

Tam Dalyell: To revert to the line of thought of my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) on contractors, is it not true that, in the time of unity of the rail industry, inquiry was really a matter of getting the truth? Now, with the fragmentation of the industry and with so many contractors involved, is my right hon. Friend at all worried that we live in a culture of blame that could obscure the truth because people might want to blame others because of legal obligations?

Stephen Byers: My hon. Friend makes an important point, but so far in the wake of the derailment at Potters Bar we have not seen the sort of finger-pointing and blame that we saw after Hatfield and Ladbroke Grove. There is a clear difference. There is a recognition within the industry that it does the industry a disservice if people do not take responsibility for their part of the railway industry's operations. That has been a noticeable factor in events since the derailment at Potters Bar.
	We need to discover the precise details of what happened, and the investigations are making good progress. I hope that the interim report, for which I asked the Health and Safety Commission on Friday, will be available in the next couple of days, because that would reassure the travelling public about what took place, even if it might not be able to tell us why it took place.

Diane Abbott: We must all await the findings of the Health and Safety Executive's inquiry, but once again there is debate about standards of maintenance and the use of unqualified subcontractors in the fragmented privatised British Rail. Does the Secretary of State understand that that can only deepen the concern with which Londoners view the coming of the public-private partnership to London Underground—a measure that the Government appear to be committed to forcing through in the teeth of all informed opinion, including that of the Select Committee on Transport, Local Government and the Regions?

Stephen Byers: We have always said that if the modernisation of the tube is to go ahead, it will have to satisfy the safety case. The Health and Safety Executive must be sure that a proper safety regime is in place. We have established a clear condition on the proposal: if the HSE is not convinced that the safety case is made, the modernisation of the underground will not go ahead. If that condition is not met, we will not proceed. Safety will not be compromised in respect of the modernisation of the tube.

Henry Bellingham: As the Secretary of State knows, the train that derailed was on its way to my constituency. Many of my constituents are regular users of that train, as am I. In fact, I came quite close to catching that train, and would have done so had I been present for the early part of Friday's business. As it happened, I took an earlier train, but some of my constituents were on the train that derailed. One was in the fourth carriage manning the refreshment trolley, and he was fortunate to escape with his life. King's Lynn has been in a state of shock, as this is the first time in 100 years that it has been directly involved in a rail tragedy of this nature.
	The Secretary of State has expressed his hope that the causes of the accident will become known in the near future, but we can conclude that it was the result of either maintenance failure or malicious interference. If the former, I agree entirely with the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) that we should carefully examine the whole nature of contracting and subcontracting, especially in the light of the fact that Railtrack's spot checks have revealed that one in 20 of the engineers who work on tracks do not have full safety certification. In that light alone, to restore public confidence in the rail network, as we all want, will require a full public inquiry.

Stephen Byers: I can understand the concerns of the hon. Gentleman's constituents in King's Lynn and North-West Norfolk. The scale of the accident is such that it must cause concern to those who travel on that line.
	It is too early to jump to precise conclusions. Although we now know what happened, we simply do not know how it happened; that is a matter for the investigations. It is premature to announce a public inquiry. It is better to let the interim investigation take place. The formal investigation by the Health and Safety Executive is to commence tomorrow. When we have the HSE's conclusions, we will be able to take a decision on whether a public inquiry is the appropriate way to proceed.

Simon Thomas: On behalf of Plaid Cymru and the Scottish National party, I wish to be associated with the sympathies and condolences extended to those who have suffered in the tragedy, and with the thanks to all those who gave assistance on the day and afterwards.
	The Secretary of State mentioned that Railtrack has undertaken 800 checks on points since the accident. Will he confirm that it is the self-same contractors who have carried out those safety checks? Is he totally happy with that obtuse way of monitoring the state of our track and maintaining it? Precisely why has it taken so long to implement the recommendations of the key Cullen inquiry? If it transpires that maintenance and monitoring played some part in the accident, who will take responsibility?

Stephen Byers: Shortly before I came into the House, Railtrack informed me of the 800 checks on points that had been carried out. I do not know the details of who will have done that. All I know is that the Health and Safety Executive is auditing the way in which the checks were carried out. The railway inspectorate has undertaken its own checks on the points in the Potters Bar area to ensure that there was not a problem with the way in which that section of line was being maintained. It has found no similar defects. The HSE is double checking the work that has been carried out by Railtrack.
	As for responsibility, we must first find out what happened. There is the danger that we might run ahead of ourselves. We are all anxious to ascertain exactly what happened and who was responsible, and that is understandable. Let us reach conclusions after a proper investigation. We can then have the debate about what action should be taken.
	The hon. Gentleman raises an important point about the vital implementation of the recommendations of the Cullen report in respect of contractors. I may have mentioned earlier my concern that not enough progress was being made. That is why, on 1 May, I wrote to Bill Callaghan, the chair of the Health and Safety Commission, to tell him that I wanted to know by the end of this month what action was being taken to implement the recommendations speedily. I wrote that it was a vital area that must be addressed urgently.

House of Lords Reform

Robin Cook: With permission, Mr. Speaker, I should like to make a statement on the Government's proposals for taking forward reform of the House of Lords.
	The Government began the process of Lords reform with the removal of the great majority of hereditary peers in 1999. We are committed to further reform of the House of Lords, to remove the remaining hereditary peers and to provide Parliament with a modern, effective second Chamber.
	We have listened carefully to the wide range of views expressed in the recent debates on Lords reform in both Houses of Parliament, and to the responses to the White Paper. We have taken account of the report of the Public Administration Select Committee. We have also considered statements from all parties that this issue should be considered further by a Joint Committee of both Houses. I hope, therefore, that the way forward that I am announcing today will be welcomed and supported on both sides of the House.
	On this vital constitutional issue, which concerns not only the composition of the House of Lords but also the role of Parliament as a whole and the relations between the two Houses, we have decided that it would be right to invite the two Houses to establish a Joint Committee, in the hope that we can forge the broadest possible parliamentary consensus on the way forward. We hope that the Houses will be able to proceed with the establishment of the Joint Committee as soon as possible.
	We have noted the recent joint statement of the two main Opposition parties that such a Joint Committee would help reconcile differences and seek a principled consensus on the way forward. We look forward to their co-operation in setting up the Joint Committee as soon as possible and making a success of its work.
	Reform of the second Chamber has implications for the future of Parliament as a whole, and in particular for the relations between the two Chambers. It is right that Parliament itself should record its views on the composition of the second Chamber. For this we believe that a Joint Committee alone is insufficient. We therefore intend to ask the Joint Committee, as the first phase of its work, to report on options for the composition and powers of the House of Lords once reform has been completed. This will define options for composition, to include a fully nominated or a fully elected House, and intermediate options. Both Houses will then be asked to record their views on these options in free votes.
	In the second phase of its work, on which the Committee will report, it will define in greater detail the proposed composition, role and powers of the reformed second Chamber, taking account of the opinions expressed by the two Houses. It should also recommend the transitional strategy for transforming the existing House of Lords into its fully reformed state, which will be particularly important if the recommendation were for a significantly smaller House. The Government's intention would then be to introduce legislation in the light of the report of the Joint Committee and the opinions of both Houses expressed in those free votes. As both the royal commission, chaired by the noble Lord Wakeham, and the Government's White Paper made clear, any proposals on the powers and composition of the House of Lords must flow from a clear understanding of its role and functions.
	The issues to be considered by the Joint Committee therefore will include, first, the role and authority intended for the second Chamber within the context of Parliament as a whole. There is, we believe, a consensus that its main role should continue to be that of a revising, scrutinising and deliberative assembly, with the power to delay, but not to seek to veto, legislation.
	The second issue to be considered is the impact of that role and authority on the existing supremacy of the House of Commons and relations with the Executive. There is, we believe, broad agreement that the Commons should retain its role as the pre-eminent Chamber and that the test for any Government should continue to be whether it can command a majority in the House of Commons. The third issue to be considered is the composition and powers of the second Chamber best suited to give effect to the role and authority intended for that House. That consideration should include the implications of a House composed of more than one "class" of Member and also the experience and expertise which the House of Lords in its present form brings to its function as a revising Chamber.
	It will also be necessary to consider the most appropriate and effective legal and constitutional means to give effect to any new parliamentary settlement, including any mechanisms required for resolving conflicts between the two Houses. To inform the Joint Committee's deliberations, the Government are today publishing the full results of the consultation on their White Paper. We received over 1,000 responses, and the full analysis is now available in the Vote Office and on the Lord Chancellor's Department website.
	The Government have a major record of constitutional reform. Since 1997, we have created a Scottish Parliament and Assemblies for Wales and Northern Ireland. We passed the first House of Lords Act 1999, the Human Rights Act 1998 and the Freedom of Information Act 2000. We have given the Bank of England independence in the setting of interest rates. Last week, the Deputy Prime Minister set out our plans to allow the creation of regional assemblies in those regions of England that vote for them. We have enhanced the role of the Select Committees, including the announcement by my right hon. Friend the Prime Minister that he will be the first Prime Minister ever to appear before the Liaison Committee. We are modernising the working practices of both Chambers. Taken together, that is the most substantial programme of constitutional reform for over a century and will stand as one of the Government's historic achievements.
	Today's announcement is another step towards ensuring that reform of the House of Lords ranks alongside those achievements. We must not allow a repeat of history in which reform has been delayed because those who wanted it could not agree and therefore left the field to those who opposed it. Our objective is to secure a second Chamber that is broadly representative of Britain today; a Chamber that will complement the Commons by reinforcing Parliament's ability to conduct scrutiny and hold the Executive to account, thereby increasing the respect of the public for Parliament. The way forward that I have outlined puts responsibility in the hands of Parliament itself in free votes. I urge Members on both sides of the House to respond not as party politicians but as parliamentarians committed to a strong Parliament within a modern democracy.

Eric Forth: I thank the Leader of the House for the generous notice that he gave me of his statement which, however, I can only characterise as Laurel and Hardy or perhaps Robin and Derry—"A fine mess you've got us into now". Or, if we wanted a one-word title for the statement, it would have to be "mañana". In April 1997, the Labour party published a manifesto.
	It put forward a number of proposals to reform the House of Lords. Among those, it stated:
	"This"—
	the expulsion of all hereditary peers—
	"will be the first stage in a process of reform to make the House of Lords more democratic and representative."
	The 1997 manifesto went on:
	"A committee of both Houses of Parliament will be appointed to undertake a wide-ranging review of possible further change and then to bring forward proposals for reform."
	Things moved on, and Labour's 2001 general election manifesto announced:
	"We are committed to completing House of Lords reform, including removal of the remaining hereditary peers, to make it more representative and democratic, while maintaining the House of Commons' traditional primacy. We have given our support to the report and conclusions of the Wakeham Commission, and will seek to implement them in the most effective way possible."
	Then, in "Completing the Reform", the White Paper of November 2001, the Prime Minister wrote in his foreword:
	"The Government is determined to proceed with this wider reform of the House of Lords. The Royal Commission offered an excellent way forward and the Government has a clear electoral mandate to undertake it. . . A reformed second chamber has an indispensable role to play, and this White Paper prepares the way for its introduction."
	In other words, we have waited five years since the original Labour party manifesto pledge, one year since Labour's second manifesto pledge and six months since the Prime Minister's pledge of action. We now we have indefinite postponement.
	Nevertheless, I welcome the establishment of the Joint Committee, not least because in January, in response to the consultation, my noble Friend Lord Strathclyde and I stated:
	"We therefore call on the government . . . to establish a Joint Committee of both Houses to review further change, including the question of composition, and then bring forward proposals for reform."
	My noble Friend said in another place in the debate on the Queen's Speech in June 2001:
	"There are huge issues which need to be debated and resolved as we move to create a stronger House: for example, issues relating to the size of the House; what limits to set on that size; how long Peers should stay; how we all get here and so on."—[Official Report, House of Lords, 21 June 2001; Vol. 626, c. 51.]
	We saw clearly some time ago that a joint parliamentary approach would be needed. We therefore welcome the statement from the Leader of the House, however belatedly it has been made. I pledge that we will play our full and positive part in the deliberations of the Joint Committee.
	May I ask the Leader two rather obvious questions? First, he has outlined what he chooses to call phase 1, which will be a broad look at composition and powers. Will he give me some idea of the time scale for that? For example, will it go well into 2003? Then there is to be consultation of both Houses of Parliament, followed by phase 2, in which there will be detailed examination of the results of the parliamentary deliberations.
	Does the Leader of the House envisage that we might run out of parliamentary time in this Parliament before anything further can be done, or can he give me an undertaking now, which will hold more water than the previous undertakings, that the Government believe that they will be in a position to bring forward proposals during this Parliament? It is important that we understand that at this stage of the process.
	Secondly, speaking of the consultation of both Houses that is to be undertaken and which I welcome, and the Government's commitment to free votes on the matter, can the Leader tell me what he believes will happen if the two Houses find themselves in conflict? Supposing the House of Commons concluded that there should be a large element of elected Members in the new upper House, and that the House of Lords reached the opposite conclusion—that there should be a small element or no element at all of elected Members. How does the Leader imagine that that would be resolved? Will we go through the loop again? Will it be a "Groundhog Day" procedure, whereby we revisit the issue indefinitely for the rest of our parliamentary lifetime?
	Having belatedly announced a Joint Committee, the Leader owes it to us to give a much clearer idea of what is in the Government's mind in terms of time scale and commitment, so that we are not led up yet another garden path to something that lies beyond, but we know not what. So I can only refer to what the Leader of the House said and quote his own words back to him:
	"We must not allow a repeat of history in which reform has been delayed because those who wanted it could not agree and therefore left the field to those who opposed it."
	Amen to that.

Robin Cook: The House will recall that, in the last sentence of my statement, I invited hon. Members in all parts of the House to respond as parliamentarians and not as party politicians. The right hon. Gentleman's opening observations fell some way short of that invitation and of the response of the Conservative party in the House of Lords. This afternoon, its Lords spokesman welcomed the statement as an "historic statement" that was "clearly welcome" and a "statesmanlike step". I fear that before right hon. Gentleman speaks about conflict between the two Houses, he should consider the conflict between the Conservative Front Benches in this Chamber and the other place.
	The right hon. Gentleman recounted some of the history. Of course, that includes 18 years when his party was in power but never made a proposal for a single elected Member of the second Chamber. It also includes four years in which the Conservatives opposed every single proposal that we made for reform of the second Chamber. Indeed, he said at the Dispatch Box that he had no difficulty in defending the hereditary principle for the second Chamber.

Eric Forth: Correct.

Robin Cook: He makes that comment, but now he wants us to believe that he is committed to ensuring that 80 per cent. of Members of the second Chamber are elected—a point for which I observe he does not have unanimous support on his Back Benches.
	As recently as in the past two weeks, the Conservative party announced in a joint statement made with the Liberal Democrats that a Joint Committee is clearly "the best way forward".

Eric Forth: No.

Robin Cook: The statement was signed by his leader in the House of Lords. I do not expect to be thanked for agreeing to what had been called for, but neither do I expect to be savaged for doing so.
	The timetable will be primarily in the hands of the members of the Joint Committee, as it should be. There is nothing new to be said about composition. I appreciate that the right hon. Gentleman, I and others in the House try to find something new to say about it, but the task is very challenging. I see no reason why a Joint Committee that was appointed now could not quickly move to a decision on the options on which the House should vote.
	I can assure the right hon. Gentleman that I want to see legislation in this Parliament. I believe that what I have spelt out provides us with a route map to secure that objective.
	On conflict between the two Houses, the first step is to try to find a way forward and to avoid such conflict. In the event of a disagreement in the vote, it will in the first instance be for the Joint Committee to consider the implications. I am inclined to tell the right hon. Gentleman that I anticipate far less conflict between the Labour Benches in this Chamber and in the House of Lords than I envisage between the Conservative Benches in the Commons and those in the Lords. I remind him that he has a long way to go before he will get Conservative peers to agree to Conservative party policy of 80 per cent. of Members of the House of Lords being elected. In the two days of debate on reform in January, more than half the Tory peers who spoke wanted no elected peers at all. In those circumstances, it is not we who should be worrying about conflict with the House of Lords, but the Conservative party.

Paul Tyler: It would be churlish not to congratulate the Leader of the House on his victory in Cabinet against the odds, although I refuse to identify who the odds are. My hon. Friends and I genuinely congratulate him and believe that he is right in saying—he has done so on a number of occasions since the publication of the Select Committee report—that there is a centre of gravity for reform. We believe that it is possible rapidly to make progress in the Joint Committee. I remind him that the suggestion of a Joint Committee goes back to the discussions between his party and mine before the 1997 election, to which the right hon. Member for Bromley and Chislehurst (Mr. Forth) referred. The idea is not new; it is just rather late in coming.
	Will the Leader of the House give us a more precise indication of what timetable the Government would like? Does he recognise that this is already the longest-running Whitehall farce in more than 90 years, and that it is time we wrote the final act? Does he accept that there should be a sunset clause? The Joint Committee should be given a limited life, then disbanded if it is not making progress.
	Does the right hon. Gentleman agree that, once the two Houses have had a free vote on phase 1, it should be possible to put a draft Bill before the Joint Committee so as to make as much progress as possible on a consensual basis?
	The right hon. Gentleman said that he intends to try to achieve the reforms in time for the next general election. Will he take this opportunity to dispel the mischievous rumour that the Government believe that it is impossible to take both legislation on House of Lords reform and an anti-hunting Bill through both Houses? That could be a major problem.
	Does the right hon. Gentleman accept that even if the Joint Committee is permitted to consider transitional arrangements—he says that it will be—it will be extremely important to prevent a hiatus, because otherwise Parliament's job of scrutinising the work of the Government could fall by the wayside?
	Finally, there is a dilemma in having a small and manageable Joint Committee and having one that is truly representative. Does the right hon. Gentleman accept that it must be of sufficient size to enable parties that are split down the middle—the Conservative party in the other place—to be fully represented?

Patrick Cormack: Hear, hear.

Paul Tyler: And perhaps in this House, too. A minimum of 18 members will be necessary to encompass all those differing views.

Robin Cook: I am grateful to the hon. Gentleman for his more generous welcome for our proposals, and look forward to his co-operation in taking forward our strategy.
	On a timetable, it would be wrong for us to predetermine a specified date by which the Joint Committee has to respond. However, this is plainly not an open-ended commitment, and we will watch and work with the Joint Committee to enable it to come to a speedy conclusion. Part of that co-operation may well include presenting it with a draft Bill. We have by no means ruled out that possibility, and look forward with interest to hearing what its members may wish to say about it during the first stage of their work.
	I assure the House that the decision that I announced has nothing whatsoever to do with the Hunting Bill. If we should find it necessary to introduce both the Hunting Bill and the House of Lords reform Bill in the same Session, so be it—we will seek as business managers to see what we can do to ensure that we secure both those objectives.
	On the size of the Committee, the hon. Gentleman touches on an issue that is, as he knows, difficult for the House. By definition, any Joint Committee has to be divided equally between the two Chambers, and only half the membership comes from here. When we set up the Joint Committee on the Communications Bill, we discovered that that left us with such a small group that it was difficult fairly to reflect the political balance in this Chamber. I therefore said at the time that any future Joint Committee was likely to be larger, and I can tell the hon. Gentleman that I anticipate that its size will be of the order that he suggested.

Joyce Quin: I, too, welcome my right hon. Friend's statement. It shows, especially in the light of last week's statement on regional government, that the Government's appetite for constitutional reform remains keen and has not become jaded. I hope that progress can be made as quickly as possible.
	My right hon. Friend mentioned the results of the consultation on the White Paper. Will he confirm that it showed that a majority of people favoured either a wholly or substantially elected upper House?

Robin Cook: I am grateful for my right hon. Friend's comments on the Government's programme of constitutional reform. It is within that context of a programme of measures to modernise our democracy that we should view this commitment to seek a parliamentary solution to ensuring that we have a second Chamber that can work as our ally, thereby enhancing respect for Parliament.
	I share my right hon. Friend's wish to make progress as rapidly as possible. Indeed, in my statement I committed the Government to setting up the Joint Committee as soon as possible.
	The consultation paper is available to hon. Members in the Vote Office. As I have said before in answer to oral questions, it showed that a substantial majority support a substantially elected second Chamber. I can confirm that of those commenting on composition, 89 per cent. favoured a majority elected second Chamber.

Patrick Cormack: I congratulate the right hon. Gentleman on the announcement. Does he agree that, in constitutional matters, festina lente is not a bad motto? Will he say something about the composition of the Committee? Will it be chosen through the usual channels by the usual channels? Will there be a proper opportunity for Members with a robust view, such as my friend the hon. Member for Bolsover (Mr. Skinner) and me, to serve? Will he assure the House that he will not be the Chairman, and might he consider inviting the hon. Member for Bolsover or me to chair the Committee?

Robin Cook: To do justice to the last point, I would have to reflect on it rather than give an off-the-cuff answer. However, I can confirm that I have no wish to chair the Committee, and I think that it would be wrong for any Minister to chair it.

John Bercow: Such self-sacrifice!

Robin Cook: I can bear to live with such a sacrifice.
	I am grateful for the congratulations of the hon. Member for South Staffordshire (Sir Patrick Cormack) on what I have announced. His Latin tag, make haste slowly, can be applied in several circumstances, but I must depart from him on this occasion. We have waited long enough for reform. In the debate in January, I read to the House the preamble to the Parliament Act 1911, which said that the arrangement was only a holding operation until provision could be made for a more representative and democratic Chamber. I have no intention that we should wait another 90 years or 90 months but hope that we can make progress in 90 days.

Tony Wright: I warmly congratulate my right hon. Friend on his extremely positive statement, which clears the blockages in the way of the reform process. I direct him to annexe A to the report on House of Lords reform that the Public Administration Committee issued in February, in which it gave a detailed month- by-month and year-by-year timetable for the way in which reform might proceed. Under "May 2002", it said:
	"Negotiations begin for establishment of Joint Parliamentary Committee."
	Will my right hon. Friend confirm that the chronology that we have outlined, which leads, eventually, to the first elections in June 2005 for a predominantly elected second Chamber, is the chronology that he is working to, and that from today the blockage to reform comes not from the Government but the House of Commons? From today, it is up to the House to decide whether it really wants to reform the second Chamber.

Robin Cook: I am grateful for my hon. Friend's comments. He speaks with authority as the Chairman of the Public Administration Committee, which issued a valuable report and showed that it was possible for people who wanted reform of the House of Lords but who came to the task with different perspectives to find a consensus. The task now is to ensure that we find that centre of gravity among the wider Parliament. My hon. Friend is absolutely correct that the matter is now in the hands of Parliament. The speed and radicalism with which we move is very much down to the way in which Members of Parliament proceed and subsequently vote.
	I cannot promise that we will keep to the timetable outlined in the report at all intermediate stages, but I share my hon. Friend's view that reform should be implemented in time for a general election in 2005, should there be one, so that elections can take place in the same year.

Several hon. Members: rose—

Mr. Deputy Speaker: Order. Before I call the next hon. Member, may I ask for brief, single questions, in order that I may call as many Members as possible?

Andrew MacKay: This is very long grass indeed. The right hon. Gentleman's comments confirm what many of us have always feared—that the Government were not serious about reform of the second Chamber but instead wanted to abolish the hereditary peers and replace them with the Prime Minister's cronies. They have achieved their objective.

Robin Cook: I am not sure how I can do justice to the right hon. Gentleman's question without going back and reading my statement from the top. I am not sure that he has listened to anything that has happened in the House since he came in. I have said that it will be the decision of the House—it can vote on the options. If the right hon. Gentleman wishes to vote for an all-appointed second Chamber, he will be free to do so, but I doubt that many people will be in his Lobby.

David Clelland: I should like to draw to my right hon. Friend's attention early-day motions 1275 and 1276, which appear on the Order Paper for the first time today.
	I welcome my right hon. Friend's assurance that the Joint Committee will be able to consider a fully nominated second Chamber. Does he agree that the revising, scrutinising and deliberative Chamber that he has described would be able to carry out its duties most efficiently if it was made up of people who were experienced and well qualified to do so? Does he also agree that direct elections would not necessarily result in such an outcome?

Robin Cook: I am grateful to my hon. Friend for his endorsement. It will not only be for the Joint Committee to consider the option of a fully appointed second Chamber; my hon. Friend and all his colleagues will also be able to argue and vote for that option when we debate the options in this Chamber. I have only one reservation about what he said. While he is perfectly right to say that any legislature must comprise well-qualified and experienced people who can bring judgment and integrity to their decisions, as Leader of the House I must say that we can find those qualities among elected Members of the House of Commons as well as among those who are appointed to the other place.

Ann Widdecombe: Will the right hon. Gentleman accept that his statement this afternoon is a most eloquent admission that the Government did not have a clue where they were going when they started reforming the House of Lords, and that, even now, after a further general election, they still have no clue about how they want to go forward? Does he also accept that their handling of this matter has been characterised by vandalism against the constitution and by vacillation in completely failing to come forward with any set plan for the future, and that he is not modernising but trying to muddle through, causing further delay without any resolution?

Robin Cook: I congratulate the right hon. Lady on having responded to this matter not as a parliamentarian but as a single-minded party politician. I was not necessarily persuaded that my last sentence would convince her to respond to this as a parliamentarian. It is perfectly plain that she is unwilling to consider reform; she is still fighting a rearguard action against the abolition of the hereditary principle. For the avoidance of doubt, I should point out that no Labour Member believes that the hereditary principle has any place in a modern democracy.

Gordon Prentice: My right hon. Friend deserves a medal. He is a great reforming parliamentarian. May I ask him how one gets on to this Joint Committee? I think that I may have something to contribute to it. [Hon. Members: "Hear, hear."] My hon. Friends agree with me.
	I want to return to the question posed by the shadow Leader of the House and other colleagues about the possibility of gridlock between the two Houses. The consultation document shows that all those who responded were in favour—to one extent or another—of an elected second Chamber, except the peers. They were the only group who preferred a House with a less than 50 per cent. elected membership. The issue of gridlock is one that must be addressed.

Robin Cook: I shall, of course, take note of my hon. Friend's bid for membership of the Joint Committee. I expect that I shall get a number of competing approaches from other hon. Members. I am not sure quite how big the Committee will be, and I cannot, therefore, guarantee that all who wish to be on it will be able to be on it.
	It will not necessarily be a disaster or a surprise if the two Chambers vote in different ways. After all, this is a democracy, and we pride ourselves on the fact that the two Chambers can come to independent conclusions. We should not regard it with dismay if they did so. I would suggest that the best thing that we can all do in the next two months is to ensure that we find a way forward that establishes a centre of gravity that can be supported in both Chambers. If we find that there is a difference in the other Chamber, the Joint Committee can consider the implications. We can also consider it ourselves if we wish to do so when we consider the measure to bring these measures into being, which will start in this Chamber.

John Maples: We are all used to Secretaries of State coming to the House and kicking for touch, but this one has gone right out of the stadium. Presumably the Leader of the House is hoping that nobody will find it and throw it back before the next election.
	After five years of a Labour Government, they are clearly showing their inability to agree on what they want to do. The Prime Minister wants a minimal number of elected peers, while all his Back Benchers want the maximum number, so forgive me if I cannot take this Joint Committee very seriously. The idea that the Government have suddenly woken up to the idea of consulting this House on important issues is a novelty to which it is difficult to give any degree of credibility; it is all part of their playing for time.
	We all know what the conclusions of the Joint Committee will be. A large number of people will want a high number of elected Members—like most of the Labour party—whereas others will want none or only a minimal number, and the ball is going to end up back in the Government's court. Would it not be better if the Government decided now what they wanted to do, and put that proposal to Parliament?

Robin Cook: The hon. Gentleman condemns us for having committed the issue to the long grass, but the statement made less than two weeks ago by the Conservative and Liberal Democrat leaders in the House of Lords says:
	"An early move to establish a Joint Committee . . . would be the best way forward."
	There is no point in senior Conservative party figures inviting us to take a course as the best way forward, only for the Conservative party to denounce it when we agree with their advice. Far from committing this to the long grass, I have just said to the House that I want to make progress in this Parliament, and I want to make progress for implementation by the next general election. Frankly, it is not credible for anyone to expect a timetable clearer or shorter than that, but of course, if we had had the Conservative party's 18 years in government we might not be having this argument five years later.

Dennis Skinner: Has my right hon. Friend warned the Conservative peers in particular that if they vote against the abolition of foxhunting there will be scores if not hundreds of Labour MPs in this Chamber who will vote for the third way—namely, to abolish the House of Lords altogether? Will he bear it in mind that if we are not able to achieve that, the important thing to remember in respect of gridlock is that we have to cut the teeth of that second Chamber? They should not be allowed to filibuster ad nauseam. We should make sure that they have a guillotine, as we have in this House, and that this House reigns supreme over any policy issue.

Robin Cook: The White Paper and my statement today make it perfectly plain that the Government are firmly committed to the principle that the House of Commons must remain the pre-eminent Chamber, and I have not heard anybody in the Chamber argue with what I believe is a universal point of consensus here. I did not become Leader of the House of Commons to give away the standing of the House of Commons relative to the other Chamber.
	My hon. Friend suggests a definition of the third way that I am not sure will command that same universal consensus, but I note his interest in abolition. Whether the motions can be tabled in such a way that he can make such an amendment is, of course, a matter for consideration.

Teddy Taylor: Could we not make progress on this very complex issue if the Government and Opposition Front Benchers accepted that having elected peers might undermine our democracy, and more so than at present? Will the Leader of the House bear in mind the fact that the public are fed up with the number of elections, and they are going on strike? Is he not aware that only a quarter voted in the European elections? Even in Rochford, where we had the highest swing to the Conservative party in England, only 29 per cent. voted? Is he not aware of the danger that having even more elections will make the public fed up to the back teeth and undermine democracy further?

Robin Cook: Although I fully understand the immense trauma undergone by the Conservatives at the last two general elections, I urge them, but not on the basis of that, not to give up supporting elections. If they go to the nation saying that they have lost all faith in elections, they will get a very loud raspberry from the electorate, who will be inclined to give them another landslide defeat third time round.

David Hamilton: May I try to help the Leader of the House? I appreciate that there is to be a free vote, but it may be best not to have a Committee, and the best way to do that is not to have a second Chamber. I am one who believes that we should vote against any second Chamber. That is the right way forward. He asks us to put our point of view as individuals. The vast majority of people out there do not agree that we should have two Chambers, and they think that there is an issue of over-governance. When the Committee goes ahead, as I suppose it will, will it consider regional government as proposed for England? When England gets that, it will find, as we find in Scotland, that a second Chamber is not needed.

Dennis Skinner: I have two tellers.

Robin Cook: I congratulate my hon. Friend on the advance that he is making from a minimalist base.
	I say to my hon. Friend the Member for Midlothian (David Hamilton) that I fully understand that some people hold the view that we do not require a second Chamber, but I would not want that to be confused with the concept of over-governance. The second Chamber is not in itself part of the Government. It is a mechanism—a forum—by which the Government can be held to account.
	The powers and role that we set out for the second Chamber in the White Paper included the scrutiny and revision of Government legislation, the ability to hold the Executive to account, and the opportunity to float novel ideas and new policy initiatives that the Executive can take on board. It is not a question of Government, but accountability of Government, and for that we need a modern second Chamber that has the legitimacy of being appointed or elected on a basis that commands consensus support.

Patrick McLoughlin: Will the Joint Committee be nominated by the Committee of Nomination?

Robin Cook: To be frank, I cannot give the hon. Gentleman an answer until I know how the House votes tomorrow. I will commend the Committee of Nomination to the House to ensure that we have fair and appropriate appointments to the Select Committees. The Committee of Nomination is primarily designed for the Select Committees of this House, but I believe that it will be possible for us to find a way forward in which we can ensure that those appointed from this Chamber to the Joint Committee are representative of this House and command the confidence of their parties. That is why we will have to have a rather larger Joint Committee.

David Winnick: Will not future generations find it difficult to understand how hereditary peers lasted throughout the 20th century, and would have lasted even longer had we not been returned to office? Does my right hon. Friend accept that many Labour Members have reservations about a fully elected second Chamber? Opinion seems to be going towards a second Chamber with nominated and elected peers, which would safeguard this House to a large extent. A fully elected second Chamber, which may not be popular among Labour Members at the moment, would in many respects pose a danger to the supremacy of the House of Commons.

Robin Cook: I have much sympathy with my hon. Friend's point. He may recall that, when we debated this matter in January, much of my speech was taken up with spelling out the risks to the Commons of a fully elected second Chamber. I urge him not to be too defeatist about the degree of support for our perspective. If he looks at the table in the report of the Select Committee on Public Administration, he will see that the largest body of opinion among MPs is for a mainly elected second Chamber. That number was greater than the number of those who support a wholly elected second Chamber.

Michael Weir: Unfortunately, the prospect of abolition does not seem to be on the table. In trying to find a role for a revised House of Lords, will the right hon. Gentleman give us a guarantee that any revising function in relation to Scotland and Wales will relate to matters reserved to this House only, and no attempt will be made to extend the powers of the House of Lords to revise Acts of the Scottish Parliament or the National Assembly for Wales?

Robin Cook: I have no difficulty whatever giving the hon. Gentleman that assurance. Indeed, it would be ultra vires and illegal for either House to attempt to revise legislation on which we have devolved administration to the Scottish Parliament. We are talking only about reserved matters, and those are the only matters that either House is competent to consider.

Fiona Mactaggart: Can the Leader of the House please assure us that he will shortly announce the membership of the Select Committee? When does he think that may happen? That may reassure those people who are unfairly denigrating this proposal as a kick into the long grass. Will he also assure us that, if the Joint Committee comes up with a timely analysis of the options on composition, which as he said have been extensively rehearsed and do not need a great deal of thinking about, he will make time for this House to reach a decision about its view on composition before the summer recess?

Robin Cook: I am grateful to my hon. Friend for wishing us to make all possible speed. It is important that we maintain the momentum for reform that we have established in the past two years. A number of decisions must be reached before we can appoint the Joint Committee. We must reach agreement on the size of the Committee and on whether the Chair should come from this Chamber or from the other Chamber, and we must identify those who should be appointed to it. That cannot be done overnight, but I assure my hon. Friend that I want to make all possible speed, which is why I said in my statement that the Committee should be established as soon as possible. A vote before the summer recess is certainly possible if the Joint Committee gets down to work quickly, and presents us with the options in good time. It is difficult to see what new matter needs to be examined, and I hope that the Joint Committee will co-operate with us in making that speed.

Andrew Mitchell: I broadly welcome the right hon. Gentleman's statement, not least because it gives us a chance to reflect further on what is currently proposed by the vast majority in the Chamber. Is it not the case that this is the elected Chamber and that we do not need yet more elected politicians, especially following the announcement about regional government last Thursday? Is it not the case that, if the Lords becomes an elected House, that will drive out those who are not attracted to the hustings but who have genuine extensive experience to add to our legislative processes?

Robin Cook: The hon. Gentleman identifies one of the strengths of the present House of Lords: there is a route of entry to it through the process of independent appointment for people who are distinguished in science, the arts, business and community life. For that reason, we propose to have an independent statutory body to choose the independent peers, without any political interference. The case for a mixed solution, in which there is room for that means of entry to the second Chamber, does not preclude others in that Chamber from being elected. If those who are appointed to that Chamber are to be Members of a Chamber with authority, it is important that the Chamber have legitimacy. In the modern world, it is very difficult to identify a more legitimate approach than the democratic ballot in order to provide elected Members of the second Chamber. Whether all hon. Members wish to live in that modern world is something I cannot help them with, but if we want to be legitimate we have to accept democracy.

Win Griffiths: I congratulate my right hon. Friend on the statement, which will enable us to make a decision before the next general election. Can he confirm that, given the primacy of this House and the view already expressed that a substantial number of those in the upper House should be elected, if a mediaeval minority seek to block the proposal, the modernising majority of the House of Commons will prevail?

Robin Cook: I am always in favour of the modern age triumphing over the mediaeval age.

David Burnside: Historically, the only criteria any Ulster Unionist uses in judging constitutional reform are: does it strengthen or weaken the Union, and does it make Government more or less accountable? On the make-up of the Joint Committee, although the Labour party has considerable representation in England, Scotland and Wales, it has none in Northern Ireland, and the Conservative party is almost non-existent in Northern Ireland, Scotland and Wales in terms of Members of the House. Can he ensure that the minority parties, including the Ulster Unionists and Welsh and Scots nationalists, have some representation on the Joint Committee because it will affect the future of the Union?

Robin Cook: I understand what the hon. Gentleman says. He will be aware that we have sought to be as helpful as we can to the minority parties to ensure that there is fair representation. I think that the new arrangements are working rather better in that respect. A Committee that drew so large a membership from the Commons that it provided for a pro rata place for the minority parties would result in a very large Joint Committee indeed. One would be looking at a membership of more than 30 when one aggregated those nominated from the House of Lords. I cannot promise a Committee that large. With a smaller Committee, some painful and difficult choices will have to be made.

Stephen McCabe: I welcome my right hon. Friend's efforts to find a way forward but seek an assurance that in balancing the membership of the Joint Committee, he will find space for the sceptical views on the Labour Benches as well—those people who are sceptical about a directly elected second Chamber and the need for more elections.

Robin Cook: I have no difficulty in giving my hon. Friend that assurance. It is important that the representation from this Chamber is balanced, and that the minority view that he describes should be represented both from the Labour Benches and no doubt from other Benches. At the same time, we must ensure that the majority view is also well represented on a proportional basis.

Anne Campbell: I warmly welcome my right hon. Friend's statement and commend him for his bravery in allowing the House to come to a conclusion on this very important issue, but some valuable work has been done already by my hon. Friend the Chairman of the Public Administration Committee in locating a centre of gravity of the opinions of the House. Does my right hon. Friend not consider that that presents an ideal opportunity for the Joint Committee, when appointed, to move forward with some speed?

Robin Cook: I have already said that I welcome the report of the Public Administration Committee as a valuable contribution to the debate. I very much hope that the Joint Committee will take account of its recommendations when it comes to its decisions. I also hope that some of those on the Select Committee may themselves be members of the Joint Committee. I would not want to pre-empt the options that may be recommended by the Joint Committee but, plainly, the consensus that was established in the Select Committee at around 60 per cent. is an issue that will have to weigh with it.

Eric Joyce: Does my right hon. Friend agree that even a substantially elected component of the House of Lords would place considerable pressure on the primacy of this House? That is precisely the reason for the damascene conversion of the Conservative party, which knows that it will not hold the reins of power in Parliament for many years to come.

Robin Cook: My hon. Friend may be right about the motivation of Conservative Front Benchers, although I note that, as yet, they have not achieved the same conversion among many of their Back Benchers. However, I do not agree with his premise: we cannot hope to maintain the supremacy of this Chamber on the basis of keeping the second Chamber illegitimate. If we are serious about maintaining our own pre-eminence, we must do so with confidence. We must not be afraid of providing for a legitimate second Chamber, which cannot act as a rival to us but can act as an ally in making sure that we have modern and effective means of scrutiny.

Malcolm Savidge: I warmly welcome my right hon. Friend's statement, particularly his decision to have a Joint Committee of both Houses and a free vote in both Houses. Surely the constitution is a matter on which we, as parliamentarians, ought to try to transcend our partisanship and seek consensus. If there turns out to be disagreement between this House and the other House, will my right hon. Friend recall the point that he made earlier; that, in both Houses, there seems near unanimity that this House ought to have primacy? If there is a disagreement, logically we ought to have primacy in finding a decision.

Robin Cook: It is certainly the case that there is broad agreement across a range of issues and the debates on composition—understandable, necessary and central—should not divert us from the fact that there is broad agreement outside that one narrow case. My hon. Friend referred to some of the party political responses and urged colleagues, as I have done, to respond as parliamentarians. I have been in this House long enough to know that it loves a cockpit of debate and rough and frank exchanges. It was necessary for us to go through the catharsis of this statement and the response to it. I hope that, having got that off their chest, the Opposition will now get down to work with us to find a way forward, because it is in the interests of this place and the whole of Parliament that we find the best consensus on that way forward.

Kevin Brennan: Given that all that the Joint Committee has to consider is the option of an appointed House, a fully elected House or the intermediate version, does my right hon. Friend agree that if it were meeting right now, it could have the options ready for consideration by about seven o'clock this evening and the House could be ready to vote on them? In other words, there is no need for the delay. There could be one meeting and we could have a vote before the summer. There should be no problem with that whatsoever.

Robin Cook: My hon. Friend has spoken with great wisdom and authority. Were I to be locked in my room for five minutes, I could probably produce the options rather more quickly than by seven o'clock tonight. But it is the nature of democracy that we have to take other people with us and fully explore other perspectives. The Joint Committee will need to do that. I agree with my hon. Friend that even while doing that, there is no need for undue delay in coming back to the House with the options.

Chris Bryant: As one of the 304 Back-Bench Members of this House who supports a wholly or substantially elected second Chamber, I wholeheartedly welcome everything that the Leader of the House has said, particularly the idea that we shall hold a free vote. It is strange; one waits for a free vote for months, and then three come in a row.

Win Griffiths: Like the number 24 bus.

Chris Bryant: Indeed. It is very exciting.
	I urge my right hon. Friend not to allow any bishops to sit on the Joint Committee. There should not be any bishops in the House of Lords and there should not be any on the Joint Committee either.

Robin Cook: Because of my hon. Friend's previous profession, he speaks with unusual authority about bishops, and when we have discussions with them, I think that I shall recommend that he speak on behalf of Labour Members.
	This is a classic case in which it is right to proceed by a free vote. Different views exist on both sides of the Chamber, so it would be wrong to try to proceed on a party political basis, with the Whip applied. It is right that both sides be able to cast their votes freely, so that we can establish where the centre of gravity lies.

Julie Morgan: I, too, would like to offer a warm welcome to my right hon. Friend's statement, which constitutes a great step forward. I particularly welcome the free vote, given that the matter is one for Parliament. I also ask what some of my hon. Friends have asked: is there any reason why the Joint Committee should not be set up immediately, and why the options—we already know what they are likely to be—cannot be reported to the House immediately, so that we can get this part of the process over before the summer recess?

Robin Cook: I agree that we need to proceed with the Joint Committee with all possible speed. As I have pointed out, specific questions need to be addressed and we need first to reach agreement on them, but I hope that they will not become obstacles to progress. Hon. Members have taken the opportunity in the past hour to air their own prejudices on the matter of composition, and it is already clear that the battle lines are well-established. The cases for and against a substantially elected second House have been well argued and aired, and I agree with my hon. Friend that the Joint Committee need not spend too long on the first phase of its work, although there will be much to be addressed in the second phase.

Paul Flynn: Will my right hon. Friend forgive the almost universally sour response from Opposition Members? The Conservatives find it difficult to cope with two features of his statement that are entirely alien to them: its precise response to the consultation process, and his offering a free vote in this House on an issue of substance—something that never happened in 18 years of Conservative Government. When consideration is given to who will chair the Joint Committee, will my right hon. Friend look to my hon. Friends the Members for Pendle (Mr. Prentice), and for Slough (Fiona Mactaggart), who live in the 21st century, rather than the self-nominated Members of the Opposition, whose spiritual home is the 17th century? Is it not right that this generation of parliamentarians anticipates with relish the undertaking of reforms during this Parliament which are centuries overdue?

Robin Cook: I am grateful to my hon. Friend for his observations, and it is certainly true that I do not recall a response to consultation during 18 years of Conservative Government that accepted the need for a fresh approach. Indeed, I do not recall much consultation at all during those years. If there had been, we might have been spared the poll tax, for a start.
	My hon. Friend mentions the fact that I have not commanded universal support from those on the Conservative Benches. I fear that I have had to carry that burden through most of my years in this House, and doubtless I will have to continue to do so. However, I am comforted by the warm and unanimous support that my statement has received from those on the Government Benches.

Orders of the Day
	 — 
	National Insurance Contributions Bill

Order for Second Reading read.

Mr. Deputy Speaker: I should point out that Mr. Speaker has selected the amendment standing in the name of the Leader of the Opposition.

Andrew Smith: I beg to move, That the Bill be now read a Second time.
	There is a simple reason for supporting the Bill: it supports an NHS that is collectively funded, comprehensively available and free at the point of need, and which is the best insurance policy in the world. We are building on the Beveridge principles by raising resources to help fund the cost of the national health service through national insurance contributions. The Bill will raise resources to enable record extra investment to be made in a reformed NHS.
	The question is not whether we need increased investment, but how to raise the money for that investment, and the Bill points the way forward. We have examined alternative health care systems and found them wanting. The Wanless report identified the flaws in alternative models. Social insurance schemes are complex; the tax base is narrower and administration costs escalate. In France the typical employer pays £60 a week per employee.
	Charging for clinical services means patients paying rising bills for individual operations and treatments. Basing our health care system on medical charges would mean that those who are ill would have to pay more for being ill. Private funding mechanisms tend to be inequitable and regressive, they have weak incentives for cost control, they have high administration costs, and they can deter appropriate use. In the United States, family premiums average about £100 per week and are set to rise next year by £13 a week.
	An independent study of health care systems in eight countries, prepared by the European Observatory of Health Care Systems, was published alongside the Budget. We are open to new ideas. Where there are lessons to be learned we will learn them. We have examined the alternatives, but the principle remains: funding through national insurance and general taxation is simply the most equitable, stable and efficient means of raising money for the national health service.

Michael Fallon: The Chief Secretary says that national insurance contributions are the most equitable method of funding, but how does he square that with the pre-Budget report of 1999, in which the Government said, in relation to the climate change levy and the reduction in employers' NI contributions:
	"This is consistent with the Government's policy of switching the burden of taxation from 'goods' like labour"?

Andrew Smith: That is perfectly consistent, on the basis that I have already explained. We are acting in conformity with the Beveridge principles and the well established practice whereby contributions made through national insurance by people when they are in work, and by their employers, are used to provide cover for when they are unable to work. A contribution is also made from general taxation. Moreover, the way in which we are introducing the changes in the Bill is equitable and fair. It is also supported by the people of this country.

Phil Hope: My right hon. Friend is right. I have spoken to employers from businesses in my community and they are well aware that many people are off work ill and waiting for hospital treatment. Those employers are more than prepared to contribute to the NHS through the NI system, as employers have done for decades, because they recognise the benefits it brings to their businesses to have shorter waiting times or for people to see their general practitioner sooner. Employers want to see investment in the NHS and they know the benefits that this Bill will bring to their businesses.

Andrew Smith: My hon. Friend is right. That has been my experience, too, when meeting business groups in my constituency and elsewhere. It was, after all, the Confederation of British Industry that pointed out that the cost of ill health to business was some £10 billion a year. Employers as well as employees will benefit from the investment that we are making in the NHS. Anthony Goldstone, the president of the British Chambers of Commerce, said:
	"Any of us in business know that we get what we pay for. If we want a world-class health service in the UK we need to pay more."

John Maples: rose—

Andrew Smith: I shall give way to the hon. Gentleman. Perhaps he will tell us how he would pay more.

John Maples: I wish to take the Chief Secretary up on a point that he made earlier. The NHS system may be the best way to fund health care, but when he talked about social insurance and what happens in the United States, he set up a couple of men of straw. Much of the funding in the US comes through health maintenance organisations—and even if the premium is £100 a week, that is less than a family of four will pay when the Government have increased spending on health to £100 billion a year. A family of four will then pay some £7,500 a year for health care. The fact is that if we did not finance the health care system through taxation but in some other way, people's taxes would be lower. In this instance, that would more than compensate for the charges.

Andrew Smith: I take it from the hon. Gentleman's intervention that he advocates abandoning the NHS—

John Maples: indicated dissent

Andrew Smith: Yes, from what the hon. Gentleman has said, it seems that he would cut taxation to make health care dependent on charges through insurance or individual charges for treatment. We should not forget that people in the US often have to pay supplements, on top of the insurance premiums that they have already paid, to get the operations that they need.
	An NHS free to all at the point of need has been the consensus in this country for 50 years. It was our hope that we could renew that national consensus on NHS funding, and we believe that the Bill is the vehicle for that. Before the shadow Chancellor, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), left the Chamber, I wanted to remind him—perhaps he saw it coming—that until the last general election, that was Conservative policy, too.
	I also remind Conservative Members of the promise that the right hon. and learned Gentleman made in his election leaflet. He said:
	"There will be no charges. Do not believe the lies which are being spread by our opponents. Conservatives will retain a free and comprehensive National Health Service."
	That is what the shadow Chancellor said in his general election communication last year—but of course he and his right hon. and hon. Friends refuse to give that commitment at present.
	While the Opposition are abandoning their promise and their commitment to the NHS, we are delivering on ours.

Stephen Ladyman: Before my right hon. Friend leaves the US examples, let us not forget that in the US, people on low incomes have to rely on other types of health care, because there is in essence a two-tier system. Did he see a recent television programme in which pharmaceutical companies were providing routine health checks for poorer people in the US? There was an interview with a lady in late middle age who said that that was the first time in her life that she had received a routine health check. Is that the sort of health care that the Opposition are promoting?

Andrew Smith: That is precisely the sort of system that the Opposition would head us towards. My hon. Friend gives a telling example.

Michael Weir: When the right hon. Gentleman referred to the CBI, he mentioned the savings to business if fewer people were off sick, and we would probably all agree about that. However, does he agree that there is a difference between companies that have the trade-off of lower corporation tax, and unincorporated businesses that receive no such trade-off? Even at this late stage, will he consider a mechanism for helping small unincorporated businesses?

Andrew Smith: We are already acting to help those businesses. Of course I understand the differences between their position and that of incorporated companies. However, the Budget proposals for VAT simplification will benefit those businesses—as will our measures concerning capital allowances and our creation of a general environment in which business can prosper. That is why there are now so many more small businesses than when we came into office. I think that 345,000 started up last year alone. We really are delivering for small business.
	I have yet to hear from any representative of such a business that they are against extra resources for the national health service, or that they believe that our proposals are not an equitable way to provide those resources. We do not pretend that we can get something for nothing. It is right and proper that we set out transparently how we shall raise those resources.
	Employees and the self-employed will pay an extra 1 per cent. in national insurance on all their earnings above £89 a week. For example, a single person on the median income of £410 a week will pay £3.70 more in real terms as a result of the income tax and national insurance changes. Those on higher incomes will pay more, while those on lower incomes will pay less. That is only fair.

Steve Webb: I should be grateful if the right hon. Gentleman would give us some clarification of the position of people in Scotland who pay national insurance contributions. Will their extra 1 per cent. eventually find its way back to the Scottish Parliament, which will not be obliged to spend that money on the health service? Can people in Scotland be sure that every penny of their national insurance contribution will go to the health service—or is there no guarantee of that under devolution?

Andrew Smith: The national insurance system is UK-wide. Scotland benefits enormously from that through the Barnett consequentials. The hon. Gentleman is right to say that this is a matter for the Scottish Executive. I understand that the Executive have given a commitment that the extra money will be invested in the health service in Scotland—[Interruption.]—as indeed has the Welsh Assembly. That point that I was coming to was that half of all families with children will pay less overall because of the interaction of these changes with the introduction of the child tax credit and the working tax credit.
	As we know, both the British Chambers of Commerce and the Confederation of British Industry recognise that employers have a strong interest in a healthy and productive work force. They recognise that there is an economic rationale as well as a social and moral imperative underpinning our proposals. It is clear to me that the British people already draw a sharp contrast between the clarity, fairness and dynamism of our proposals, and the vacuous evasive manoeuvring of the shadow Chancellor and his colleagues. In public they say that they do not know what their policy is, while in private they say that charges—or, in the shadow Health Secretary's words, a "self-pay" system—are the way forward.
	Clause 1 proposes how primary class 1 contributions are to be calculated. From April next year, the new employee contribution will consist of two elements: the main primary rate of 11 per cent., instead of the current 10 per cent., on earnings between the primary threshold and the upper earnings limit, and an additional primary rate of 1 per cent. on all earnings that exceed the upper earnings limit. In response to concerns raised by the Select Committee on the Treasury and others, I can confirm that the Bill does not provide any power for the new 1 per cent. rate to be changed by secondary legislation.
	Clause 2 amends the current secondary class 1 contribution from 11.8 per cent. to 12.8 per cent. for employers so that they, too, will make an equivalent additional contribution. The rates paid by employers on benefits in kind and pay-as-you-earn settlement agreements—classes 1A and 1B—are also increased to 12.8 per cent.
	Clause 3 proposes how class 4 contributions from the self-employed are to be calculated. Through this Bill they will pay an extra 1 per cent. on their profits or gains above £4,615 a year. From April next year, the new Class 4 contribution will also consist of two elements: the main class 4 rate of 8 per cent. on earnings between the lower and upper profits limits, and an additional class 4 rate of 1 per cent. on all earnings that exceed the upper profits limit. That new additional class 4 rate will not be amendable by secondary legislation, either.
	As I have said, the measures in the Bill, and what we are doing overall to match investment in the national health service with reform, are the fairest and most efficient means of raising money for the national health service. It is interesting that, according to The Sunday Telegraph poll, more Conservative voters agree with us on this matter than agree with Conservative Front-Bench Members and their colleagues. I think that 54 per cent. of Conservative supporters backed our proposals for raising money to fund the NHS.

Evan Harris: The right hon. Gentleman says that this is the fairest way, but would he concede that some forms of taxation, particularly some forms of income taxation, would be even fairer, to use his terms, than the rise in national insurance contributions, which does not, for example, tax very wealthy people who have unearned income and are not in work?

Andrew Smith: It is perhaps a consequence of debating these matters four times in two weeks that no points have so far been raised that have not already been exhaustively explored. The answer to that question is that because we are raising the money through national insurance contributions, many pensioners on fixed incomes will not have to make the additional contribution. Equally, raising the money through income tax would have hit and penalised savers. The hon. Gentleman points to rich people, and a very complex system might have exempted the other groups, but we decided that this measure was a fair, efficient, widely and appropriately based means of raising the money. My experience, my hon. Friends' experience in their constituencies and the evidence of the polls show that the public overwhelmingly understand and support what we are doing.
	These measures, along with the Budget, have enabled the Government to announce the largest ever increase in investment in the NHS, raising spending on average by 7.4 per cent. in real terms each year. That is an annual cash increase of 10 per cent, and it is not just for three years but for five years, creating the stable platform necessary for long-term investment. With the year-on-year rises, UK health spending will grow from £65.4 billion this year to £105.6 billion in 2007–08. Even allowing for inflation, that is a rise of 43 per cent. over five years. Since 1997 there has been a real-terms doubling in health service investment. UK health spending will rise from 6.7 per cent. of national income in 1997, and 7.7 per cent. of national income this year, to 9.4 per cent. by 2007-08, and that investment is being matched by reform.
	First, on accountability, there will be independent audit, inspection and scrutiny of patient complaints, with a duty to account for money spent and standards achieved, and report to the public. In future, an annual report to Parliament will be prepared by the new independent auditor, accounting for the money allocated to the NHS, where it has been spent and the results that have been achieved. That will be matched by a local report from every primary care trust that will spell out to each household in its locality the services available and the value for money that is being achieved.
	The second principle of reform is devolution. As the Secretary of State for Health has already announced, there will be vital new reforms. They will include new financial incentives for hospital performance, greater freedoms for high-performing hospitals and trusts, powers and resources that are devolved to front-line staff and primary care trusts, reform of social services care for the elderly, and a series of measures increasing choice for patients.
	Patient choice will help to drive the reformed system. Money will follow the patient, so resources will be tied to performance. The NHS will treat more patients more quickly and to a higher standard.
	Let me give some examples of what the extra investment will mean in constituencies throughout the country. There will be 35,000 more nurses, midwives and health visitors, 15,000 more doctors and consultants, and 42 major hospital schemes. That is the difference: more nurses, more doctors, more hospitals, more care centres and better treatment. That is what the Bill is about—investment in the nation's health and investment in the future.
	Throughout the whole debate, the dividing line has not just been between those who support raising national insurance and those who do not. It is between those who support an NHS comprehensively available and free at the point of need and those who would abandon it. There is a very clear choice before us all. Do we want a high quality national health service to meet the needs of the British people and funded through general taxation, or a system in which families are forced to take out private insurance and have to pay more for their treatment through charges? That is the real choice. We choose the NHS, whereas the Conservative party chooses charges.
	We are providing record new investment combined with reform. Money and change together will deliver results as we reaffirm the basic principle of the NHS—that health care should be available on the basis of need, not of ability to pay. To vote for the Bill is to back the NHS that the British people want and deserve. I commend the Bill to the House.

John Bercow: I beg to move, To leave out from 'That' to the end of the Question, and to add instead thereof:
	"this House declines to give a Second Reading to the National Insurance Contributions Bill because its provisions fail to reflect the need for change and improvement in the NHS to match additional resources, will hamper job creation and further increase the burdens on business, and will impose additional taxes on employees, including those on whom the public services rely."
	I begin by drawing the House's attention to my declaration in the Register of Members' Interests—specifically, that I do occasional work on staff communication skills with employees of J. P. Morgan and Deutsche Bank.
	If Ministers' statements were to be believed—a mighty if, it has to be acknowledged—this is the Bill that was never to be. During the election campaign, the Prime Minister told the Daily Express—I quote for the delectation of the House—
	"We are not going to clobber people on higher incomes. We are not going back to 1992 and the shadow Budget. We have not the slightest intention of hammering people on £30,000 and £35,000 and the higher income brackets."
	Not to be outdone, the Chancellor, on 23 May 2001, described suggestions that he would raise the national insurance ceiling as a Tory smear, which, he said, "I utterly repudiate." Speaking on the "Powerhouse" programme on 29 May last year, the current Secretary of State for Trade and Industry insisted:
	"We've got no plans to raise the ceiling on national insurance contributions",
	adding unwisely:
	"It is not going to happen."
	Less than 72 hours before polling day, the hon. Member for Streatham (Keith Hill) declared:
	"Gordon Brown has made it perfectly clear that we have absolutely no plans to raise the ceiling on national insurance".
	The hon. Gentleman got his reward: no longer a junior underling at the Department for Transport, Local Government and the Regions, he is now the Government's Deputy Chief Whip.
	"To Byers" could be the new verb that describes the contagious disease of misinformation that rampages through the Government.

Phil Hope: Will the hon. Gentleman give way?

John Bercow: In a moment. I will not accuse Ministers of lying. Suffice it to say that they are in a class of their own in giving credence to untruths.
	The changes outlined in the Bill that the Chief Secretary to the Treasury has commended to the House today will help to raise £8.6 billion in 2003–04 and similar sums in years thereafter. It is notable, although the right hon. Gentleman did not mention it, that the 1 per cent. increase in the rate of primary class 1 national insurance contributions represents a proportionately bigger increase to those married women who took up the option—prior to its withdrawal—to pay national insurance contributions at a reduced rate, earning no entitlement to contributory national insurance benefits as a result of those contributions. That reduced rate is currently 3.85 per cent; it will rise to 4.85 per cent. in April 2003.

Phil Hope: Will the hon. Gentleman give way?

John Bercow: I can resist the hon. Gentleman's soothing bromides not a moment longer. I give way.

Phil Hope: The hon. Gentleman is practising his communication skills most eloquently this evening. I have a couple of questions for him. Given that they are to vote against the Bill tonight, have the Opposition given up on the NHS and its principle of treatment according to need, not ability to pay? If they intend to match the spending on the NHS that we have pledged, how will they pay for it? Will they make the sick pay for being sick?

John Bercow: No, we are certainly not going to do that. I am indebted to the hon. Gentleman for giving me the opportunity to confirm that we believe passionately in the ideals of the national health service. However, we believe that after five years of mismanagement and ineptitude under a benighted Labour Administration we are now further away than ever before from those cherished ideals. The Opposition are committed to reform—

Bill Rammell: Will the hon. Gentleman give way?

John Bercow: In a moment—the hon. Gentleman must contain himself with what resilience he can muster.
	The Conservatives are committed to reform. We will look at the options. We want a service that is better. Next week the hon. Member for Corby (Phil Hope) and I are to play alongside each other in a tennis match on behalf of the House. Let me say, in all charity, that it is to be hoped that his excellence at tennis is rather greater than his capacity to make incisive interventions in debate.

Bill Rammell: I welcome the hon. Gentleman's statement that he remains committed to the national health service free at the point of use. If that is the case, can he explain what the shadow Secretary of State for Health meant by "self-pay"? What does that concept mean to the Conservatives?

John Bercow: The hon. Gentleman has not grasped the reality of the situation in which we find ourselves. We have a two-tier system. Last year, 250,000 people without insurance paid for their operations. It should not be necessary in the year 2002 for people to use their life savings to save their own lives. My hon. Friend the shadow Secretary of State for Health has said that people are having to pay, and he does not want that situation to become worse. He recognises the need for reform and he is considering the various options. He knows that the Government have made a mess of things. I say to the hon. Member for Harlow (Mr. Rammell) that my hon. Friend has probably forgotten more about the national health service than the Secretary of State knew in the first place.
	Mr. Chas Roy-Chowdhury spoke about the savage imposition on married women, as reported in the Financial Times on 3 May. He is the head of taxation at the Association of Chartered Certified Accountants. He said:
	"This extreme and disproportionate increase for those currently paying the lower rate is grossly unfair and is a case of the Government wishing to wring as much money as possible from everybody, even widows and older women. Many of these women"—
	this is hardly a laughing matter, even for the hon. Member for South Shields (Mr. Miliband)—
	"are near retirement, and the last thing that they need is this tax hike to upset their finances."
	There is speaking with forked tongue, the breaking of promises and picking on the most vulnerable. It is clear that there are no depths now to which new Labour will not sink.
	John Whiting is a tax partner at PricewaterhouseCoopers and president of the Chartered Institute of Taxation. He often quizzes people as to what is the second biggest tax after income tax. It is not value added tax, it is not corporation tax and it is not petrol duty. It is the national insurance contribution. As he said:
	"We now have a top tax rate of 41 per cent., and another hole in the fiction that national insurance contributions are anything other than a tax."
	What has been the reaction of business to what has been unveiled by the Chief Secretary and his ministerial colleagues? The CBI says:
	"It is the worst kind of tax rise as it adds straight to the cost base and is unrelated to profits."
	The head of the Engineering Employers Federation, Martin Temple, observes:
	"£3 billion of extra costs is £3 billion less to invest."
	Nick Golding of the Forum of Private Business labels the rises
	"a further disincentive to employ."
	Ian Fletcher of the British Chambers of Commerce attacked the rise as "indiscriminate".

Vernon Coaker: The hon. Gentleman has quoted many organisations. Will he quote ordinary people? Will he quote what individuals in our constituencies are saying about the extra investment that will go into the national health service, and how important they think that extra investment is? Does he think that to quote them would be worth more in this debate than quotations from representatives of the organisations to which he has referred?

John Bercow: I am slightly perturbed by the hon. Gentleman's intervention. The individuals to whom I have referred would find it peculiar to be described as in some way extraordinary. They have the advantage of the hon. Gentleman because they boast experience and expertise that lend authority to their pronouncements. However, the hon. Gentleman is always good at egging me on and encouraging me in debate. If he will exercise some patience, which is a virtue, he will recognise that I intend to refer to the impact of the measures set out in the Bill on the very ordinary people for whom he purports to care.

Andrew Smith: Is the hon. Gentleman prepared to quote the shadow Chancellor of the Exchequer, who may be an ordinary person? At the last general election, he said:
	"Conservatives will retain a free and comprehensive national health service."
	Will the hon. Gentleman repeat that pledge? If he cannot, why not?

John Bercow: I am disappointed in the Chief Secretary. He should know by now that my right hon. and learned Friend the shadow Chancellor of the Exchequer is an ordinary person blessed with extraordinary abilities. That should be patently apparent to all Members of this place and others well beyond. [Interruption.] The hon. Member for Dumbarton (Mr. McFall) must contain himself; he must exercise what restraint he can muster. I know that he is a distinguished Member of this place and I believe that he is the Chairman of the relevant Select Committee. I say to him in all kindness that if he behaves himself, I will give way. If he does not, I will not. He has a simple choice, but he must allow me to deal first with the Chief Secretary, which I shall relish. My right hon. and learned Friend the shadow Chancellor, and all my right hon. and hon. Friends and I are committed to an improved NHS which serves the people of this country instead of letting them down. I reiterate the fundamental principle that the availability of health care should be determined on the basis of need, not ability to pay.

Kevan Jones: rose—

John Bercow: The hon. Gentleman must wait.
	That consideration is so strikingly clear that, as the late Enoch Powell used to say, only an extraordinarily clever person could fail to grasp so simple a point.

David Cameron: On the impact of the increase on ordinary people, is my hon. Friend aware that the John Radcliffe hospital, which serves the Oxford, East constituency of the Chief Secretary, as well as the constituencies of the hon. Member for Oxford, West and Abingdon (Dr. Harris) and myself, is short of 300 nurses and its vacancy rate is running at 14 per cent? Has my hon. Friend calculated the effect of increased national insurance contributions on trying to hire badly needed staff in our hospitals?

John Bercow: It is very simple; the bull-headed and short-sighted policy on which the Government seem intent will make a difficult task much more difficult.

Steve Webb: Will the hon. Gentleman give way?

John Bercow: In due course; I do not want to squander the hon. Gentleman's contribution. His professorial interventions are of great value and it would be a pity to waste one just yet. If he will allow me, I shall store him up and deal with him a bit later.
	Most strikingly of all, Stephen Alambritas of the Federation of Small Businesses stressed that taxes will rise for 3 million self-employed workers. Pointing out that the average income from self-employment is just £13,890 a year, compared with an average income from employment of £21,842 a year, he rightly castigated the Government for undermining any attempt to help the low-paid. My right hon. and hon. Friends will have noticed that whenever I have spoken today about increased burdens, higher taxes and objections from business and other organisations, Government Members have been determined to throw me off the scent. They do not want to talk about damaging consequences, to focus on the realities or to acknowledge the protests that are springing up from reputable organisations and individuals the length and breadth of the United Kingdom, because they prefer to live in an ivory tower. They can try to do so, but it will not work; we shall point out the damage inflicted by their policies.

John Mann: rose—

John Bercow: The hon. Gentleman is a regular contributor to our debates; I anticipate eagerly what he has to say, but he will not say it just yet.
	The timing of savage tax rises could scarcely be more insensitive. In the past year, manufacturing output has fallen at its sharpest rate for a decade. Manufacturers are struggling in a sea of tax, regulation and administrative complexity which is deeper and more hazardous than ever before. Ministers' response has been to deliver a financial body blow by jacking up the cost of employment. It is no wonder in those circumstances that representatives of no fewer than nine manufacturing industry trade associations from the plastics, rubber, coatings and associated machinery and tool-making sectors, speaking for 315,000 employees, fired off a letter of protest to the Chancellor and the Secretary of State for Trade and Industry only last Wednesday, complaining that a staggering 78 per cent. of all the new money to be raised in 2003–04 will be grabbed from business. If the Chancellor knows that for 20 plastics companies the extra bill will be £3.4 million a year, or that 60 per cent. of them plan to meet that cost by cutting jobs, he should be ashamed. If he is ignorant of that important fact, it is frankly time he did his homework.

Chris Bryant: Earlier, the hon. Gentleman said that the shadow Chancellor was an ordinary man of extraordinary talents; he seems to be proving this afternoon that he himself is an extraordinary man of ordinary talents. He said that the increases in national insurance contributions on both sides may be a tax on jobs. What is unemployment in his constituency, and what was it in 1997? How does he explain the fact that it has fallen by 55 per cent.?

John Bercow: The hon. Gentleman really ought to do better than stick to a prepared script that ignores what I have said. I do not know about his educational attainments and other attributes, but let me explain my position in easily intelligible terms. If a tax rise has not yet taken effect, it should not be too difficult for him to grasp that the damaging employment consequence that I predict has not yet taken effect. Ordinarily, for his edification, the impact follows the policy; the policy will have an impact in due course. I am a charitable fellow, so if he is still in doubt and requires further illumination, I will happily go to any recess in the House later and give him a tutorial on that elementary point.

Chris Bryant: rose—

John Bercow: No, the hon. Gentleman made a mess of it once; he can hardly be so unreasonable as to expect me cruelly to compound his embarrassment.

Steve Webb: rose—

John Bercow: Of course, I shall give way to the good professor.

Steve Webb: The mention of tutorials got me going.
	The hon. Gentleman implied that employers' national insurance is a tax on jobs and that increasing it will damage jobs. Does he think that employers' national insurance contributions are at an optimal rate, or should they be cut?

John Bercow: That is a useful intervention. We shall set out our position on taxation levels with clarity and specificity well in advance of the next general election. The hon. Gentleman, who is a reasonable fellow, will accept the proposition that for a party which aspires to government—I cannot credibly accuse his party of that—it does not make much sense, having lost an election 11 months ago on its last manifesto, to be expected to produce today the contents of its next one.

Andrew Selous: Does my hon. Friend agree that the tax increase is particularly unwelcome for the plastics industry? I recently visited a plastics manufacturer in the automated components industry in my constituency. It faces the prospect of price reductions of 7 to 15 per cent. being forced on it by its customers. It is desperately trying to pare costs and is having some success, but is nevertheless confronted with a bill of an additional £70,000 to £80,000. It told me that the change is particularly unwelcome because it pays national insurance whether or not it is making a profit; I do not believe that the Government have realised that.

John Bercow: My hon. Friend is correct; the cost is incurred, regardless of whether a profit is being made. The Government's message to companies in my hon. Friend's constituency and elsewhere can be succinctly encapsulated: "Thank you for trying to bear up under competitive pressures. Here's our solution—please pay another tax so that it is more, rather than less, expensive, for you to employ people." The National Association of Pensions Funds has warned that more companies are likely to axe final salary pension schemes to recoup the cost of the 1 per cent. rise in employers' national insurance bills. It said that the change, which will cost companies about £4,000 million a year, would drive businesses to seek out ways of cutting costs. That is the considered verdict of people at the grass roots, not the self-appointed judges on the Government Benches.

John Mann: The hon. Gentleman has quoted various business spokesmen to support his case. The chairman of the Bassetlaw chamber of commerce, a small business man in a heavy manufacturing area, describes the Budget as fair. Why?

John Bercow: I do not know. It must be something in the water in Bassetlaw. The hon. Gentleman and I served together on Lambeth borough council from 1986 to 1990. I thought then that the hon. Gentleman was a peculiar fellow, and I have never had any reason since to revise my opinion. Quite what caused the people of Bassetlaw to vest their faith and confidence in the hon. Gentleman I do not know, but I cannot be held responsible for the results.
	Tax rises—I know that Labour Members do not want to hear about the tax rises, but they will keep hearing about them—mean that a house officer in the national health service will be £276 a year worse off. A nurse consultant will be £312 a year worse off. A specialist registrar will be £408 a year worse off. A senior house officer will be £516 a year worse off. A consultant will be £672 a year worse off. The Government are punishing the very people whom they disingenuously claim to support. The Chancellor stands exposed. Far from being a generous distributor of largesse, he is now seen in his true light as the nation's most outrageous pickpocket.

Kevan Jones: rose—

John Bercow: I want to make progress, but if the hon. Gentleman contains himself—I do not think he is about to pop like a champagne cork—I shall happily give way to him later.
	Just as older women have been singled out for discriminatory treatment, so too have those on modest earnings. A self-employed person on £20,000 a year, even after allowing for the offsetting effects of tax deductibility, can expect to pay an extra £143 a year.
	Perhaps the most shaming fact of all is that those who possess the least must cough up the most. Over the past five years, tax on the poorest quintile of households rose from 38 per cent. to 41 per cent., as against a rise of only 1 per cent. for the highest quintile. The net result is that a 2 per cent. gap favouring the richest has risen to 4 per cent. since the party of Bernie Ecclestone and Lakshmi Mittal took office. [Hon. Members: "And Richard Desmond."] Indeed, and Richard Desmond, as my hon. Friends helpfully advise me from their sedentary positions.
	What about the public sector? The cost of the employer increase to the police service, with just under 125,000 people, will be an extra £32 million a year. The cost to the teaching profession, with more than 361,000 staff, will be an extra £79 million a year. The cost to local government—

Stephen Pound: rose—

John Bercow: In a moment. The hon. Gentleman is spectacularly misnamed, in view of his speedy commitment to the abolition of our national currency and its replacement with another, but he is a jovial character, and I can resist him no longer.

Stephen Pound: I am reluctant to interrupt the hon. Gentleman's flow, and I can understand why, on public service broadcasting in America, he is already considered something of a cult. [Interruption.] Perhaps that lost something in translation.
	May I ask the hon. Gentleman a couple of questions? Has there ever been a time in the proud and glorious mercantile history of this nation when any honest cordwainer or cooper has said, "Whacko! More taxes. I'm happy with that."? Has there ever been an occasion when people have not objected to taxation? Has there ever been a time when manufacturers in this country have not recognised that the health of the nation is essential to the productivity of the nation?

John Bercow: What people object to is paying their money and getting no value in return. That is the answer to the hon. Gentleman.
	The cost to local government, which has been lumbered with more responsibilities than ever before and forced by Government to set the highest level of council tax since its inception, will be an extra £300 million a year. Perhaps the most depressing irony of all, in the context of a Bill which ostensibly is designed to bolster our national health service, is that the NHS itself will face a bill of an extra £200 million a year as a result of the increase in employers' national insurance contributions.
	Look at the care home sector. [Interruption.] I know that the hon. Member for Rhondda (Mr. Bryant), who is chuntering to himself—a very worrying sign at this early stage in his parliamentary career—does not want to discuss this important matter, but I say to the hon. Gentleman and to the House that since 1996–97 almost 50,000 care home beds have been lost, creating personal tragedies for thousands, owing to the blithering incompetence of Ministers. Now they seem hell-bent on strangling what remains of a sector whose margins are often slim—not infrequently, for the smallest care homes, less than 5 per cent.—and whose wage bills account for about 80 per cent. of their total costs. The Registered Nursing Home Association, the National Care Homes Association and individual nursing home owners have united in a chorus of condemnation of ministerial short-sightedness.
	Yet the Chief Secretary claims that the Bill will bring about the improvements in health care that we all want to see. Of course, as my right hon. and hon. Friends are painfully aware, every year Ministers promise that reform and extra spending will go hand in hand, but every year that promise is broken. We see no reform; we see no change; we no improvement. We see only the higher taxes which are the instinctive response and the favourite sport of Labour Governments, new as well as old. Without change—

John Mann: Will the hon. Gentleman give way?

John Bercow: The hon. Gentleman has had one opportunity. He made a frightful, blithering mess of it. He can hardly expect me to have another go at indulging him—that I will not do.
	Without change, we will not see the difference. In Scotland—

Kevan Jones: What reforms would the hon. Gentleman propose, in line with the tax plans that he does not intend to lay out tonight? [Interruption.] I accept his point about the election, but can he give a commitment that the Conservative party is committed to health care free at the point of need?

John Bercow: I do not know how many times one has to underline one's commitment to a comprehensive national health service which is available to people on the basis of clinical need and not on the strength of ability to pay. I have said it many times before; I am saying it again. I am reiterating the commitment of the Conservative party to a fundamental, wholesale and searching review of the basis of delivery and funding of health care in this country. It could not be more explicit. It is not my fault that the intervention of the hon. Member for North Durham (Mr. Jones) was spoiled by the sedentary interjection of his hon. Friend the Member for Ealing, North (Mr. Pound).

Kevan Jones: rose—

John Bercow: No, I will not give way again. I want to develop the arguments.
	The Chief Secretary claims that the Bill will secure improvements. As I said, every year we see no reform, no change, no improvement; we see only the higher taxes which are both the instinctive response and the favourite sport of Labour Governments, new as well as old. Without change, as I said, we will not see the difference.
	In Scotland, Wales and Northern Ireland spending on health is much higher than it is in England, but in key respects the service is getting worse. In Scotland over the past five years, spending has risen by 28 per cent. in real terms, but over exactly the same period the average waiting time for an out-patient appointment has risen by 25 per cent.
	There could hardly be a more graphic testament to the sheer inadequacy of the status quo. The chairman of the British Medical Association said recently:
	"The NHS in its current state cannot survive without radical change."
	That change is essential if we are to translate care from a word to a deed. Even the Health Secretary has blurted out the worst kept secret in Britain—that the national health service is the last great nationalised industry.
	Waiting lists and waiting times are rising. The number of care home beds is falling. Bed blocking and cancelled operations have soared. Mixed sex wards abound. Doctor and nurse shortages put us to shame in the league tables of the Organisation for Economic Co-operation and Development and of the European Union. Patients travel as far as South Africa for treatments that should be available here.

Chris Bryant: Will the hon. Gentleman give way?

John Bercow: No.
	In 2000–01, the Department of Health failed even to spend £693 million that was allocated to it by the Chancellor. There are now more bureaucrats in the NHS than beds, and the morale of NHS staff is at an all-time low. Waste and fraud cost the service £10 billion a year.

Tam Dalyell: Will the hon. Gentleman give way?

John Bercow: Of course I shall give way to the Father of the House.

Tam Dalyell: Will the hon. Gentleman help us with his credentials for being quite so certain about what is happening in Scotland, as I know personally that many improvements have been made there?

John Bercow: I always listen carefully and with respect to the hon. Gentleman. My assessment is that the service in Scotland has not improved as one would expect consequent upon the increase in resources that it has enjoyed under his Government. I say to him that I have not depended on advocacy, but grounded my case in evidence. I have referred to what struck me—and I hope would strike him—as the significant fact that in precisely the same period as spending on health has increased by 28 per cent. in real terms, there has been a 25 per cent. increase in the average waiting time for an out-patient appointment. That is the reality; it may not seem natural and might not have been expected, but it is the consequence of the mismanagement of our national health service and the defects of the status quo that reigns within it.
	There are now more bureaucrats than beds in the NHS—[Interruption.] These points are important, so I shall repeat them. The morale of NHS staff is at an all-time low and waste and fraud cost the service £10 billion a year. All too many wards are breeding grounds for MRSA—methicillin resistant staphylococcus aureus—and the Public Accounts Committee found but 18 months ago that infections caught while in hospital killed about 5,000 people a year. Perhaps most tellingly all, one's chances of surviving cancer are markedly worse in the United Kingdom than in many other industrialised countries.
	What was the response of the Secretary of State for Health to the miserable catalogue of underperformance that is failing the British people? The night before his statement to the House on the NHS plan, according to the 21 April edition of The Sunday Times, the right hon. Gentleman sat in his office with colleagues with a collection of papers strewn all over the place, munching on Marks and Spencer ready-made pasta and sweating over what he could possibly say to the House fewer than 24 hours later. Professor Alan Maynard, the eminent economist from York university, dismissed the Government's proposals for reform as "horse manure".
	I shall not go as far as that because I am a charitable soul, as you can testify, Madam Deputy Speaker. However, what we do know is that the extra nurses, doctors, hospitals and primary care centres about which the Secretary of State for Health talked are only expected, not promised, and are not even expected until 2008. We know that he merely hopes that the legislation to establish the Commission for Health Care Audit and Inspection will be introduced in the next Session and that the first inspection report is unlikely to materialise before 2005.
	We know that the Secretary of State has not even begun to consult local councils on the plans to make them responsible for bed blocking. He wants to pass the buck from a Government whose fault it is to local government, whose fault it is not, and he has not even had the decency to let the fall guys know of his plans to stitch them up. What a shower these Ministers are.

Ian Liddell-Grainger: My hon. Friend is no doubt aware of the reduction in beds—256 of them have gone in Somerset—and that bed blocking is now a major problem in rural areas and is getting worse. Does he agree that unless the Government take action, care homes in rural areas will disappear and people will have to go into hospitals, as there will be nowhere else to go?

John Bercow: My hon. Friend is entirely right; he speaks from personal experience. It is only to be hoped that even now, at the 59th minute after the 11th hour, the Chief Secretary might be prepared to reconsider the matter. I am sorry to say, however, that he has specialised in putting his own case even if that has meant distorting the statements of others. For example, he referred to Anthony Goldstone and his supposed verdict, but did not quote all his remarks. Of course, Mr. Goldstone, whom he prayed in aid, said:
	"we now have to live with these tax increases, but we say to the Chancellor there is no coming back for more, whether openly or stealthily."
	Mr. Goldstone indicated that he did not think that the Government were going about things in the right way. What a pity that the right hon. Gentleman chose not to—or inadvertently omitted to—give the full context and flavour of Mr. Goldstone's remarks.
	While the Secretary of State for Health ducks, dithers and delays, damage is done every day. The Bill offers no answer. It shows that the Government have a closed mind and refuse to learn from abroad. To adapt the celebrated and justified verdict on the Wilson Government,
	"Never in the field of political affairs has a Government taxed so much, delivered so little and been in such an indecent haste to blow its own trumpet."

Vernon Coaker: I am very pleased to follow the hon. Member for Buckingham (Mr. Bercow) and to have the chance to respond to one or two of the points that he made. I think that we are taking part in an historic debate in which we see clearly the divide between his side of the House and ours—it was made plain in his speech. It is historic as for the first time in a number of years, we have seen a clear argument put for the introduction of increased taxation to pay for improved public services.
	With respect, I thought that the hon. Member for Buckingham made a strategic and tactical error when he referred to a range of occupations and professions and specified what the taxes would cost people in each of them. His mistake and that of the Conservative party is that they have not realised what Labour Members realise, which is that, far from seeing that cost in the old way in which they saw tax—money that they paid without getting anything—people are now saying that they want to invest in their public services. They have accepted the argument that was advanced at the last election for investment and reform in our public services. They now want to see that investment and they understand and realise that they will have to pay for it. The point is not what tax people pay, but what they get for it. The Government will be judged not on the amount of tax that we are asking people to pay through the increased national insurance contributions, but on whether they see the results of that increased investment that we are putting into the national health service.
	The shift in the debate has been huge. I remember standing for election and arguing the case for increased taxes to pay for improved public services a number of times only to lose significantly. It is a great credit to our Government, the Treasury team and others that we have now shifted the debate away from tax cuts and on to investment and reform as the winning combination. That is a significant shift in our political culture.
	We will pay for massive increases in health spending of 7.4 per cent. in real terms in the next five years. As my right hon. Friend the Chief Secretary said, the amount spent will shift from £65.4 billion this year to £105.6 billion in 2007 and 2008. Those are staggering figures—huge figures—but people accept the need to pay more because they want new hospitals, shorter waits, new drugs and a modern NHS with more doctors and nurses.
	It is a mistake on the part of Conservative Members to rubbish the NHS as it currently stands. To say that there has been no improvement in the NHS over the past few years completely belies people's experience. It is not true to say that it is a complete shambles and that nobody receives decent service, decent treatment or a decent operation—every single day, tens of thousands of people go to hospital or to their doctor and receive treatment that they are proud to be able to receive and about which they write letters of thanks to ward staff and doctors.
	We need more investment, and significant problems remain to be addressed, but to say that every single hospital, every single surgery and every single operation goes wrong and is a disaster is not true, and it is not the experience of ordinary people.

Phil Hope: Does my hon. Friend agree that what the Tories are doing is not an accident, but part of a carefully laid out strategy? They are running down the national health service to try to convince people that it does not work. Once they have done that, they can say that they have an alternative—that is, to charge people and force them into private health insurance. Their strategy is aimed at the eventual privatisation of the NHS, and we should reject it absolutely.

Vernon Coaker: I thank my hon. Friend for that important point. Every time we see a Conservative spokesman on television or hear one on the radio, they simply rubbish what is happening in the NHS. When I speak to people who work for the NHS, they say that although there are real problems, we should recognise progress where it exists. We all have people in our constituencies who come to us to complain that they are waiting too long for an operation, there are not enough consultants, the buildings they have to visit are too old, there is not enough of this or that, or that a certain drug is not available. There are real problems and challenges still to be met, but we should reiterate that progress has been made. The solution outlined by my right hon. Friend the Chief Secretary at the beginning of the debate—to increase investment in the NHS through the rise in national insurance contributions in the Bill—is the fair and equitable way to rebuild the NHS and to respond to the difficulties that people describe to us.
	We agree with the Wanless report that general taxation is the best way to achieve that. It is the fairest and most equitable system that we have, but it has been rejected by the Tories—they want more private medical insurance or social insurance, which are more inequitable and costly. My right hon. Friend quoted figures on the social insurance systems in France, where employers pay on average some £60 a week towards health care for an employee on average earnings, and in Germany, where employers pay on average £30 a week. We heard about the United States, where family premiums for private insurance average £100 a week and are set to rise on average by £13 a week.
	Those are the choices that confront us. It is perfectly reasonable for people to say that we should fund the health service through private health insurance or social insurance, but I am proud that we have rejected those options and said that we want improvements in the NHS to be paid for through increases in general taxation and national insurance. That is because we believe that that ensures equitable access to treatment, that it is the fairest means possible, and that it remains true to the original principles of the national health service.

John Maples: I share the hon. Gentleman's allegiance to the principle of care being free at the point of use, but I want to ask him the question that the Chief Secretary failed to answer. The national health service may be a far better way to fund health care than either social insurance or health maintenance organisations—the main component in the United States—but the hon. Gentleman cannot quote figures that hide what is being paid here. When we are spending £100 billion a year on the health service, the average family of four will pay £7,500 a year in tax towards it. That may be good value, but he should not pretend that it is cheaper than what people pay in France, Germany or the United States, because it is not.

Vernon Coaker: With respect to the hon. Gentleman, he will have to put those arguments to the electorate. My argument will be that general taxation is the fairest and most equitable way of funding improvements to the NHS and of ensuring that we have the standards that we want. I am happy to present that argument to the electorate, as are my hon. Friends.
	The rise in national insurance contributions is paying for improvements. We all remember what happened under the Conservatives between 1979 and 1997, when national insurance rose from 6.5 per cent. to 10 per cent. without any corresponding improvements in the social wage. Our increase will lead to improvements in the NHS, with a £2.7 billion package for the low paid through a new tax credits system. The 1 per cent. rise that continues above the upper earnings limit ensures that the contribution increase is progressive. That is what people want—a fair and progressive way of raising the additional funds that are needed, then invested, in their health service.
	Alongside that investment people want reform, and I am pleased that that will happen. There will be more beds, new buildings, increases in social services spending and structural change. I remind my right hon. and hon. Friends on the Front Bench that although we must ensure that patients are given more choice, that should be based on quality, not price competition.
	The new health inspectorate, the Commission for Health Care Audit and Inspection, is important. It will not only audit the use of the new money, but consider private sector quality. More co-operation with the private sector is another important aspect of reform.

John Bercow: I always enjoy listening to the hon. Gentleman, because he is decent, sincere and well informed. I know that he is a Nottinghamshire, not a Scottish, Member, but may I nevertheless ask him this question? Why has Scotland experienced, throughout the same periods, both a real terms rise in health spending of 28 per cent. and an increase in the average waiting time for an out-patient appointment of 25 per cent.?

Vernon Coaker: The hon. Gentleman makes a mistake about the argument being for either resources or reform—it has to be for both, as we propose. We believe that increased investment and reform together will lead to shorter waiting times and a whole range of improvements in our national health service.
	The country has faced a choice between publicly funding improvements to our national health service through higher taxation and taking the route of more private money. For many years, I stood for election calling for increased taxes to pay for improved public services. Then, I lost that argument. Now, thankfully, we are winning it. I am proud to be part of a Government who are increasing taxes to improve our public services. Reform must take place alongside that investment. The Bill will go a long way towards ensuring that we have the funds and resources to provide the national health service that we need for the 21st century.

Evan Harris: The shadow Chief Secretary is right that much has been said about the subject of the debate—for example, by him, the Chancellor and my hon. Friend the Member for Truro and St. Austell (Matthew Taylor), who is giving me a chance to get my teeth into Government health policy this afternoon. I am pleased to see him in his place.
	Several matters have not been tackled, and I hope to cover them this afternoon. It is important to emphasise that Liberal Democrats welcome the additional resources for which the Bill provides, and we will vote for the measure. After all, we called for the resources in the first place, not shortly before the Budget, and not one, two, three or four years before it but five years ago. We called for additional resources from general taxation to save the national health service. The Government made the same commitment in 1997, but without the resources to go with it. Year after year, we called for the very aspect of the Budget that is so popular with electors: increased revenue from fair taxes. Although I do not believe that the Government have gone far enough, the taxes should be as fair as possible in order to pay for the health service.
	We welcome the resources, but we have several anxieties and criticisms. The measure is five years too late, and it came as a surprise to those who listened to the Labour party before the election. It said that taxes, which by implication included national insurance contributions, would not go up. Such behaviour damages the integrity of politics, because politicians should be honest with the electorate.
	The Chief Secretary has stayed to hear my contribution, and I invite him to admit that, before the election, he did not predict that national insurance contributions would increase significantly. I give him the opportunity to say that he had no idea that that would happen or, alternatively, that he realised that national insurance contributions would rise, but did not believe that it was worth making that explicit to the electorate.

Chris Bryant: Will the hon. Gentleman give way?

Evan Harris: I was hoping that the Chief Secretary would reply, but I shall give way to a fine substitute.

Chris Bryant: I am glad that I will do. Does not the hon. Gentleman remember last year's general election campaign? The subject was extensively discussed; many journalists pushed the Chancellor and tried to get him to make specific commitments on the upper earnings limit and various other aspects of national insurance. My right hon. Friend pointedly refused to do so.

Evan Harris: The Chancellor pointedly refused to say that there was a good chance that national insurance would have to rise significantly shortly after the election. But it is in fact a popular act, and yet refusing to be honest with people before an election is destructive to the electoral process. I shall revert to that briefly later.
	The measure is not as progressive as it would be if income tax were used. The 1 per cent. increase in employers' national insurance contributions is a stealth tax, which can represent a significant burden on industry and have an impact on job creation. To some extent, it is self-defeating because organisations such as local government, for which some of the money is intended, will lose through having to pay employers' national insurance contributions. I shall consider exactly how much money should be spent on local government later.

Stephen Ladyman: The hon. Gentleman became a Member of Parliament in 1997, at the same time as me. Does he remember the manifesto on which he stood? It promised a grand total of £540 million a year extra for the national health service—half the sum that the Government put into it. Liberal Democrats intended to raise that money through changes to the national insurance system. Why was it right then but wrong now?

Evan Harris: The hon. Gentleman needs to go back to our manifesto, because the funding was not intended to come from the national insurance system.

Stephen Ladyman: Here is the manifesto.

Evan Harris: Let me deal with the point. Our commitment has always been over and above existing Government spending plans, not to burn the money that Labour found for investment but to add to it and to be honest and say that if people want decent public services they have to pay for them. I therefore believe that the hon. Gentleman deceived his electorate twice. Before people claim that they will save the NHS or invest in public services, they must specify the source of the money. In costed manifestos that were audited independently for two elections, we stated that funding for education would come from a penny on income tax. In the last election campaign, we said that money for the health service would be raised through an increase in the top rate of income tax. Does the hon. Gentleman believe that that is an honest and progressive way of raising the money? Will he answer that?

Stephen Ladyman: Yes.

Evan Harris: Perhaps he is more honest than he was in the general election campaign.

Stephen Ladyman: The hon. Gentleman began by challenging me to go back to the Liberal Democrat manifesto, which I have. It states:
	"We will:
	Invest more in the NHS. We will invest at least an extra £540 million every year in the NHS to pay for our policy priorities."
	It goes on to say that the money will be raised through the national insurance system. It is crystal clear. The penny on income tax applied to the health service only in the 2001 manifesto.

Evan Harris: The hon. Gentleman has the misfortune of being patently incapable of quoting and of facing an author of the document, my hon. Friend the Member for Truro and St. Austell. If the hon. Gentleman has the courage to provide the quote, we can refute his words. We have been clear about the matter. [Interruption.] All the fuss from Labour Members is simply defensiveness because they did not have the guts to do what they have subsequently done. They did not have the courage to put to the electorate before an election the fact that income tax or other taxes must increase to pay for public services.

Several hon. Members: rose—

Evan Harris: I can take as many interventions as Labour Members like, but they are on dangerous ground. However, I shall give way first to my hon. Friend the Member for Truro and St. Austell.

Matthew Taylor: My hon. Friend might find it helpful to know that our 1997 manifesto proposed cuts in employers' national insurance contributions, funded by the carbon tax, which the Government adopted in a different form through their energy levy.
	My hon. Friend might also find it helpful to reflect on the fact that while we proposed an upfront increase of £540 million for the health service after the election, the Labour Government were elected on a pledge to save the NHS, but imposed two years of real-terms cuts by adopting Conservative Budget proposals.

Evan Harris: They went further. They not only stuck to Tory spending plans, which were savage for public services, but found resources to fund tax cuts for the well off, beyond published Conservative spending plans. That was simply twisting the knife

John Mann: rose—

Parmjit Dhanda: rose—

Evan Harris: They want more. I shall give way to the hon. Member for Gloucester (Mr. Dhanda).

Parmjit Dhanda: The hon. Gentleman has not answered the question put by my hon. Friend the Member for South Thanet (Dr. Ladyman). Is it true that the 1997 Liberal Democrat manifesto proposed only an extra £5 billion for the NHS, when the Government provided an increase of £20 billion in three years?

Evan Harris: The hon. Gentleman mentions a £5 billion increase proposed by the Liberal Democrats. That sounds like Treasury calculations in a press release, given the Government's history of triple counting.
	We are worried about not only the method of raising the money and the fact that it is not progressive, was not honestly advertised, is late and, in the case of the employers' national insurance increase, self-defeating, but the way in which it is spent. We are worried about whether it will go to the parts of the health and social care organisations where it can be most effective, or be channelled specifically to achieve political targets without making the maximum impact on patient care. We are worried about the way in which the Government continue to manage the health service through too much interference, centralisation and structural change for the sake of change, not the benefit of patients.
	Labour Members, in pushing at an open door or facing an open goal with the lack of Conservative policy, talk about a health service that is universal, comprehensive and free at the point of delivery, but they should consider the health service that they have delivered. It is not free at the point of delivery; there are prescription charges for those who are not exempt. Many believe that that is a regressive method of asking the sick to pay for the health service.
	Many people cannot afford to pay prescription charges for all their medication. Patients often ask my former colleagues in the health service to specify the prescription medicines that they do not need so much, so that they do not have to pay for them. We have made a commitment to try to remove the unfairness in exemptions for prescription charges. People believed that the Labour party might do that for cystic fibrosis sufferers, since it made a pledge in opposition to exempt those who survived into adulthood from prescription charges. Again, it reneged on that in government. Similarly, eye checks and dental checks are not free at the point of delivery, as the Liberal Democrats would wish them to be, not only because that is a fair way of doing things, but because it would encourage people—

Vernon Coaker: Free eye tests, free dental checks, free prescriptions—how much is all that?

Evan Harris: If the hon. Gentleman had read our manifesto more than his colleague has, he would know. If such screenings were free, people would go for such checks, which would help them to have good health in the future.

Bill Rammell: rose—

Evan Harris: I look forward to the intervention of the hon. Member for Harlow (Mr. Rammell).

Bill Rammell: As usual, I have taken the opportunity to read the alternative Lib Dem Budget. Many people listening to the hon. Gentleman's last contribution will have gained the impression that the Liberal Democrats are in favour of abolishing prescription charges. Will he confirm that the alternative Liberal Democrat Budget—the only document on which he can be reasonably judged—does not propose to abolish prescription charges?

Evan Harris: In the alternative Budget, we made it very clear that we would freeze prescription charges—[Hon. Members: "Ah!"] Well, I think that people who find it hard to pay prescription charges would prefer, in the first instance, a policy of freezing the charges that the hon. Gentleman's Government have increased year upon year. The increases in prescription charges under his Government—increases similar to those that he and his colleagues used to criticise when the Conservatives implemented them—have been significant in this Parliament.
	We made it clear in our manifesto that we would seek to abolish prescription charges. If the hon. Gentleman looks at our next manifesto, he will see how that is going to be funded, because, unlike the Labour party, we say how we are going to fund our commitments. Rather than making empty promises to save the NHS—as Labour did five years ago, four years ago, three years ago and two years ago—without having the resources to do so, we will provide an indication of where those resources would come from.
	Labour Back Benchers, in criticising the Conservatives, suggest that the NHS is somehow comprehensive at the moment. I do not blame the Labour party for the fact that it is not comprehensive, and that there is rationing, but it is important that those of us who want to save the NHS are at least honest about the fact that not every treatment is available to everyone who could benefit from it. Labour Members who campaigned on these issues know that, for example, someone suffering from multiple sclerosis will not necessarily have access to beta interferon. People wanting prompt surgical treatment might have to wait, sometimes for too long, and sometimes beyond the point at which their condition is operable. A whole series of drugs in cancer treatment, and in others, are not available to people.
	The question that we all face today—it is also one that the Conservatives must address—is not whether there is going to be rationing but how much rationing there will be, and how comprehensive we can make the health service. That will depend on the amount of resources going in, the amount of preventive work that is conducted, which the Government often ignore, and the efficiency with which the resources are spent. So, let us not pretend that, under Labour, the health service is as comprehensive as we would wish. The Government have to recognise that, before they attack the Conservatives for seeking to make it less comprehensive.
	I want to return to my earlier point about this not being the most progressive way of funding the health service. Income tax would clearly have been a more progressive way of funding this increase, and that is what we propose in our alternative Budget. The Chief Secretary was singularly unable to recognise that an increase in the top rate of income tax would ensure that those who were paying for an increase in funding for the health service were those most able to pay.
	I gave notice to the hon. Member for Bolsover Mr. Skinner) that I intended to point out his rather ridiculous intervention in Treasury questions last Thursday. I know that I am taking my life in my hands by saying this, but I did give him notice. He argued that, because some pensioners pay income tax—he said that half of them did so, when it is actually one third—it was a bad, regressive tax, and that obtaining these funds through national insurance contributions was fairer. I do not know on what basis he feels that it is his job to protect the interests of Baroness Thatcher and her husband, who are wealthy pensioners living off a large unearned income and who will not pay a penny more on their national insurance contributions.
	Before Labour Members argue that income tax is somehow regressive because wealthy pensioners would have to pay it, they must recognise that if we want to find the most progressive way of funding these increases in public services, we have to look at the better off who have done very well and ask them to pay a little more, in a fair way, before we ask people earning small amounts—as little as £5,000 a year—to pay more through national insurance. Before we ask those people to pay, we should ask the very wealthy.

John Mann: I would not dream of putting words into the mouth of my hon. Friend the Member for Bolsover (Mr. Skinner), but our constituencies share quite a long border and very similar characteristics, having both been mining constituencies. I want to ask the hon. Gentleman a question about pensioners in my constituency, who have the same characteristics as those of my hon. Friend. The vast majority of pensioners in mining areas have a second pension from British Coal and—because of the scandal of health and safety in the coal industry—now receive industrial injuries compensation to the tune of £6 billion. They are precisely the pensioners who would lose out if this increase were to be funded through income tax rather than national insurance contributions. How would the hon. Gentleman answer that point?

Evan Harris: I refer the hon. Gentleman to the answer that my hon. Friend the Member for Truro and St. Austell gave to his almost identical, but more briefly expressed, question at column 975 on 1 May. I suggest that he picks up a copy of Hansard.
	The point that the hon. Gentleman's pensioners will make clear to him, as mine do to me, is that pensioners rely on the health service and on adequate funding being given to it. They are of one voice in wishing that these increases had been introduced five years ago. By now, we could be five years into a 10-year plan, instead of one year into it. We could be watching the first newly qualified medical students emerging at the end of their training, rather than seeing new medical schools being set up only this year. Nurses whose training places had been funded by increased resources could already be on the wards by now. Five years have been wasted. For the many pensioners who cannot write to the hon. Gentleman because, sadly, they have passed away, this increase has come too late, as has the delivery that the Labour party promised.
	The Government published the NHS plan in 2000. In the following year, and in this one, they have published details of the delivery of the NHS plan. Perhaps, in 10 years' time, we shall see a new document outlining how they will deliver the delivery of the NHS plan. The Government's history on the management of health service funding consists of a series of comprehensive spending reviews that have not been comprehensive and in which the money has sometimes not been spent. The only thing in their favour is that they have constantly been reviewed and revised. In 1997, this Government hit the ground reviewing, rather than running. They have not dealt with the health service in the way that it needed to be dealt with.

Bill Rammell: rose—

Evan Harris: I shall give the hon. Gentleman one more chance.

Bill Rammell: One of the difficulties with these debates with the Liberal Democrats is that we hear spending commitments sprayed around like confetti, but when we analyse them they do not add up. Will the hon. Gentleman tell the House clearly and precisely what net additional health service spending—above and beyond the Government's current plans—the Liberal Democrats are committed to, and how they would finance it?

Evan Harris: As I said earlier, we welcome the current plans. The level of resources that the Government are now talking about for the NHS—social services are still to be the poor relation—is about the level that we would wish to see spent. Indeed, the hon. Gentleman can look at our manifesto and our alternative Budget to see that we were the only party at the time to be honest with the electorate about what these resources would be. I know that the hon. Gentleman is not used to straight counting and straight figures, because of the triple counting and re-announcing that he is used to from his own side, but I think, in all modesty, that he should give us credit for announcing our spending plans to the public before the election.
	The 1 per cent. rise in employers' national insurance contributions is a stealth tax, and is a potential significant burden for industry. Indeed, the Government recognised that when they announced, in their March 1999 Budget, that they were going to tax the "bads" and not the "goods", and cut tax on employment to encourage employment opportunities. That was in reference to, yes, a cut in employers' national insurance contributions. What applied in 1999 to employers—particularly those in manufacturing industry, faced with the problems of a high pound and the decline in manufacturing—should really apply now if this really is a Government of stability, at least in terms of policy.
	The proposal is also self-defeating, because the local authorities will have to pay in NICs about the same amount extra that they will receive to fund care of the elderly, even before the ridiculous and punitive fines system is imposed. It has been estimated that the additional costs for the care homes sector will be £50 million in NICs. That has not been factored in. If it has been factored in by the Government, they must give a net figure for an increase in funding in those important care sectors. They have not done so, because they fear that there may be a negative net figure in certain areas—a cut in the money available to social services.
	The Government want to spend the money on the health service and they have set out examples of how in a Department of Health document. Some issues are worrying, and I would be grateful if the Minister addressed our concerns when she winds up the debate. The idea that those moneys should be spent on financial incentives for hospitals wholly misunderstands the basis on which people in the health service work. They work because of a public service ethos to treat patients to the best of their abilities.
	The idea that we can wring more out of those dedicated professionals by giving hospitals financial incentives to get people in, to get people out and to treat them as day cases or not as day cases suggests that their inspiration is mercenary rather than professional and dedicated. It also runs the risk of significantly distorting clinical priorities and makes the health service more of an accountants' paradise, moving to a bottom-line analysis of health care delivery rather than one based on consideration of the patient's needs.
	The Government say that they will establish a new commission to reassure us on how the extra funding is spent. The first place to which a new commission examining whether funding is spent correctly should look is its own creation. Remember, the Government rightly set up the Commission for Health Improvement under the Health Act 1999. They followed that with a refusal to allow it to consider the private sector, setting up the National Care Standards Commission a couple of years later, to begin functioning this April.
	Then, while debating the latest NHS deform Bill on Report, we heard about another structural reform, as the Government said that they would merge the CHI and the newly established NCSC after all, despite saying that they would not when we advocated it during consideration of the previous legislation. All that money was spent on establishing a commission that was dissolved shortly afterwards. We heard nothing more until another announcement of a new health commission—this time, merged with Audit Commission functions and the NCSC. How much money has been wasted on the failed attempts to get this right?
	We also hear that the Government are to insist that primary care trusts send patients prospectuses to tell them what services are available. That would be even more worth while if the Government insisted that PCTs openly and explicitly tell patients what services are not available. I return to the point about rationing: we should consider not the question whether there is rationing for the health service, but how explicit we are, so that people who are deciding whether to vote for the resources to go to the health service know that some services will not be available if they do not vote for those resources.
	The major concern, and our biggest problem with the Government's proposals for spending the money, is how social services are being treated. The Government must recognise that, across the country, local authorities are spending £1 billion more—taken from council tax and other services—than what the Government say they should spend on social services. So, the Government are saying that there is £1 billion of cuts to be had from social services spending or they are happy for education or, more likely, environmental budgets, as education is protected, to be cut to pay for the care of the vulnerable.
	Perhaps the Government want council tax to rise. Whatever we say about NICs and income tax for pensioners, Labour Members must accept that council tax is much more regressive, particularly for pensioners on a fixed income. The failure of the standard spending assessment to match need means that the most vulnerable—pensioners paying council tax or children who want funding for education or special needs provision—have to pay for the vulnerable users of social services.
	The Government have not only failed to fund social services adequately, but they now say that social services will be fined if funding is not provided to deal with bed blocking and the problem of delayed discharge. We know what that means—not that social services and local authorities will pay the fines, but that they will cut other social services funding on which they will not be fined to avoid those fines. Spending on responsibilities without statutory protection, including vulnerable children, the mentally ill and the disabled, as well as some where statutory duties apply, will be cut.
	Indeed, pressures on social service spending come not only from the elderly, but from the vulnerable young and the huge increase in the number of looked-after children who need those resources. Forcing local authorities to rob Peter to pay Paul or to rob Darren to pay Dora to avoid those fines is low politics of the worst kind.
	The Government should ensure that their social services funding matches if not exceeds NHS funding. The Wanless report is revealing in that respect. Table 5.4 shows personal social services spending in England and every column covers four years of projected increase, except that for the current spending review period. Instead of covering the years 1998–99 to 2002–03, it covers the three years from 1999–2000 to 2002–03. Every projection in that column lists average real-terms growth of only 1.2 per cent. compared with about 7 per cent. for the NHS. That shows the low priority that the Government plan to give to social services.

Kevin Brennan: Will the hon. Gentleman give way?

Evan Harris: In a moment. What the Wanless report does not show is that between 1997 and 1999, according to the Library, there were real-terms cuts made under Tory spending plans, imposed by the Government on the most vulnerable. [Interruption.] I note that the Paymaster General is yawning at this point.

Dawn Primarolo: Will the hon. Gentleman give way?

Evan Harris: In a moment. Vulnerable people who use social services will want to know why the Government felt it possible to cut social services in real terms—after allowance was made for the additional duties funded by the special transitional grant—in those first two years. Was not that asking the most vulnerable social services users to pay for the Government's unfunded education promises in those early years?

Dawn Primarolo: I was listening closely to the hon. Gentleman, but will he return to the point made by my hon. Friend the Member for Harlow (Mr. Rammell)? I studied the shadow Budget produced by the Liberal Democrats not two months ago and the total spending raised for all public services, including health, would not match even what we are spending on health. Would the hon. Gentleman like to apply some of the honesty that he implores the rest of the House to apply by talking about what the Liberal Democrats have costed instead of his wish list?

Evan Harris: I am delighted that the Minister is paying attention. If so, she will see that our investment in the early years of that projection, which is what our alternative Budget was due to cover, is higher and made quicker than what the Government promise. One of our main concerns about the Government's proposals is not only that they are one, two or five years too late to meet their commitment to save the NHS, but that they are slow to start. That is why not all the proceeds from NICs are going into the health service, particularly in the early years.

Dawn Primarolo: If what the hon. Gentleman says is true, the Liberal Democrats would need to raise more than the Government are currently raising to invest in the NHS. Will he now tell the House, as he recites his wish list, how much it would cost and where the Liberal Democrats would raise the money to pay for it? That is not in their shadow Budget.

Evan Harris: It most certainly is in the shadow Budget. I take every opportunity to make the point that we would ask the best off in society to pay not the extra 1p NIC on employees that trickles through as the only progressive measure, but 10p on the top rate of income tax on incomes of more than £100,000. That means that those who have done particularly well out of the Minister's Government—many of whom may have contributed to her party, we hear—would be asked to pay for the health service. If she looks at our figures, which have been independently costed, she will see that our funding matches what she is providing over the cycle, but that it provides more in the early years.

Bill Rammell: rose—

Evan Harris: The Paymaster General has still not replied to my question, but perhaps the hon. Gentleman who is seeking to intervene can tell us why the Government cut social services funding in the early years. Does the Paymaster General now regret cutting social services spending in the first two years?

Steve Webb: The Chancellor stood up on Budget day and announced that the economy would grow substantially faster than the Government had previously thought. The Government had billions of pounds, which provided these substantial extra sums for the health service. That information was not available to my hon. Friend when he set out our proposals.

Evan Harris: That is the point we are making. The funds and the taxation that we promise are additional to Government projected revenues.

Chris Bryant: rose—

Evan Harris: The hon. Gentleman will know and will be jealous of what we have been able to achieve in government in Scotland, and we could do more if the Labour party in Scotland had not shackled itself to the commitment not to raise fair taxes, which is what the Government did for far too long.
	I question the Government's position on money following the patient; it is sad to see the Labour party parroting the Tory line on money following the patient, which it opposed when it was in opposition. The Labour party said that it would abolish the internal market. That internal market never really existed, except that money followed the patients for the services that were commissioned—which is the new Labour word for purchased—by fundholders. The Government have created primary care groups and primary care trusts, which are fundholders writ large. Now they are saying that money will follow the patient. But that does not mean more choice if the money merely follows the patient from queue to queue. People who write to me do not want a choice of which 12-month queue to join; they want access to their local hospital. A litany of local health services have been closed under the Government, so local choice has been denied, not increased.
	What is the Conservative position on the future of the health service? The Tories are the second greatest danger to the health service, were they to come to power. It is clear that they do not love the NHS, because their strategy is to talk it down in the hope that they can persuade people to move to a different system that is palpably less fair.
	The Government are hoist on their own petard, because one of the strongest Tory arguments is that Labour put huge resources into the health service in their first four or five years in office—a false argument—and the health service has not got any better. I think that the Government accept—it is certainly accepted by Wanless—that that funding was not the step change that they are now proposing.
	The Labour party cannot have it both ways. It cannot agree with us that the funding it is now proposing is required and is a step change, and also argue that that happened five years ago. We are not where we want to be already, because the Government have not put in the resources.
	It would be fine if the Government had said that they were not going to put in the resources because no one wanted to pay more tax, so we would not save the health service. Instead, they stuck to Tory spending plans and provided only limited increases, and during that time they repeated announcements, triple counted and talked about billions of pounds. To the people who are now asking what has been delivered that made it seem as though the money had gone into the health service.
	The Tory posters saying "You paid the taxes, but where are the teachers and the doctors" were only half wrong. The Government announced significant increases—although presumably from Santa Claus and not from taxation—but never put in those resources.
	We do not have the health service we require, because we do not have the doctors, the nurses and the beds. The resources that the Bill will make available will provide those doctors, nurses and beds. I hope that the five-year delay and the Government's failure to be honest does not make it too late to save the NHS with the funds provided in the Bill, which we will support tonight.

Phil Hope: A filibuster is traditionally used in Parliament when Members oppose legislation, not when they are in favour of it. Given the previous contribution, I am surprised to learn which way the Liberal Democrats intend to vote.
	What we are doing in the Bill is historic. This is landmark legislation, and will place the national health service on a sound and robust financial footing. It puts a roadblock in the way of Tory plans to privatise and break up our national health service. The Bill produces a structural shift in the resources available to the NHS. That is the important point. It will provide a permanent future for health care, built on Labour's principles of a free health service based on need, not on ability to pay.
	Under the Tories we experienced 18 years of deliberate disinvestment. Money was taken out of the NHS to pay for tax cuts. We know what happened. Every day we see all around us in our constituencies the legacy of that disinvestment. The Tories run down the NHS—I was sad to hear the Liberal Democrats doing the same just now—criticise it endlessly, and never accord it the success that it is having, so that people lose confidence in it. As people lose confidence in the service, in come the Tories with their plans for charges and private health insurance. They play on people's fears to force them down that route. They have no moral right to do that.

David Ruffley: I do not want to interrupt the hon. Gentleman's robust start to his speech, but should I deduce from what he is saying that any future increases in health spending that necessitate more Government money will come from national insurance increases rather than income tax increases? That seems to be the logic of what he is saying.

Phil Hope: The hon. Gentleman has hit on exactly the point I was trying to make. As a consequence of the 7.4 per cent. increase year on year that the Bill will generate, spending on the national health service from national insurance contributions will rise from £65 billion in this financial year to £105.6 billion in 2007–08. He is right to point out that as a result of the Bill, national insurance contributions will provide the robust financial security for the NHS that it never had under previous Tory Administrations. That is why the Bill is historic.
	For a century, Labour has campaigned and fought for social equality and social justice, and for the fundamentals that matter in society, such as people's health. I feel privileged to be in the Chamber for the Second Reading of a Bill that is placing the NHS beyond the ravages of a Tory Government, and putting it in the hands of the people for its future longevity and sound delivery.
	It is also significant that this is not just about a system of health care in the United Kingdom. If we get this right, it will be a model for other countries. It will show every western democracy and every emerging democracy in other parts of the world that we can deliver health care through general taxation that meets people's needs without forcing them to pay from their own pockets, without making the sick pay for being sick. We do not have to go down that route. The Labour Government in the United Kingdom are showing the world one of the most spectacular success stories. [Interruption.] Tory Members are shaking their heads. They cannot bear the thought that a Labour Government are showing the world how to produce one of the finest health services on the planet, which is fairly funded and efficiently delivered.
	I could not believe it when the hon. Member for Oxford, West and Abingdon (Dr. Harris) said that national insurance contributions were not a progressive form of taxation. Of course they are. That is the point about national insurance: people pay according to how much they earn. Moreover, pensioners on low fixed incomes will not have to pay because they do not pay national insurance. As we know, pensioners use the NHS disproportionately; the older people get, the more ill they will be. How much more progressive can you get? Those who need the health service most will not have to pay for these extra resources.

Evan Harris: rose—

Phil Hope: We had 35 minutes of the Liberal Democrat spokesman, and that was plenty of time for him to make his points.

Kevin Brennan: My hon. Friend is right to say that the Liberal Democrats' argument is nonsense. In their 1997 manifesto they promised to spend £540 million extra on the health service. We spent more than that on the health service during that Parliament. They promised to fund increases by putting up taxes on cigarettes—which the Government did—and by tinkering with national insurance. It is utter tripe for them to suggest that they would have spent more on the health service than we have spent.

Phil Hope: Tripe may be too polite a word to describe the contribution of the Liberal Democrats. It was interesting that the Liberal Democrat spokesman signally failed to answer the question that my hon. Friend the Paymaster General asked about exactly how the Liberal Democrats were going to fund their proposals. What was it they announced today for their manifesto at the next election? I think I heard it said that they would abolish all prescription charges. I think that free eye tests and free dental checks were mentioned. It will be interesting to read the Liberal Democrats' manifesto. Their current spending plans do not match what we are putting into the NHS, and they would put extra costs on top, which they do not have a clue how to fund.

Evan Harris: Will the hon. Gentleman give way?

Phil Hope: We can dismiss the Liberal Democrats. In the hon. Gentleman's 35-minute contribution, he failed signally to deal with—

Evan Harris: Will the hon. Gentleman give way?

Madam Deputy Speaker: Order. The hon. Member for Corby (Phil Hope) has made it clear that he has no intention of giving way.

Phil Hope: There is another reason why this debate is important. Why do we need to put more money into the NHS? The Labour Government have spent five years investing in the NHS. In my area, we have a totally refurbished accident and emergency unit. We have a new orthopaedic centre, a new endoscopy suite and a new eye care ward. I have a list here. There has been hundreds of thousands of pounds of new investment under a Labour Government in the past five years, which I am proud of and which my constituents are benefiting from—but all is not right in the NHS. We would not be here raising money through national insurance contributions and putting through wholesale reforms of the NHS if all were well with the world. We know that it is not. That is why we have the Bill. We need more resources and more reform.
	There are still huge problems to be addressed, but unlike the Tories and the Liberal Democrats, instead of running down the nurses and doctors who work in the health service, instead of rubbishing what has already been achieved, we acknowledge what we have achieved, but rightly say that we have a lot more to do.
	I shall now make a small constituency point—a plea to the Economic Secretary to the Treasury, who is now on the Front Bench. I know that she does not have responsibility for health care spend, but forgive me if I make the point that a recent report by Northamptonshire health authority showed that Corby had the highest inequalities in Northamptonshire. Corby people have the lowest life expectancy, the highest levels of coronary heart disease, the highest death rates from cancer, the worst rate of respiratory diseases and the highest levels of child poverty in Northamptonshire. Therefore, Corby desperately needs the extra investment. Increased spending on the NHS is literally a question of life or death for my constituents, so while we may argue about the niceties of how to raise the money, the fundamentals are there, staring us straight in the eye.

Evan Harris: Will the hon. Gentleman give way?

Phil Hope: I guess the hon. Gentleman still does not realise that he had 35 minutes, and we do not want to hear any more from him.
	This is not just about the treatment that people receive from their general practitioner, or their hospital operation. We all have people with those particular needs in our constituencies, but I want to emphasise what I call the softer side of health care, which is about preventing ill health. The money should be used to promote a healthy lifestyle. Activities such as the sure start programme, which is partly funded by the health service, make a real difference to children and families in the poorest estates in my constituency.
	In the rural area of my constituency, we have some innovative schemes run jointly by health and social services. We have a hospital at home service, funded by the NHS but allowing patients in rural areas to return home sooner than they would otherwise do after their operations. We have heard a lot of nonsense from the Opposition about bed blocking. We know that bed blocking causes a squeeze in the system because people cannot leave hospital, but we are putting the resources in. We are investing in social services and in provision such as intermediate care for elderly people, so that people can leave the NHS when they have had their treatment and recuperate away from the hospital bed, freeing that for another person to be treated. In a place near home, or even in their own home, they can receive the treatment that they need after an operation.
	Corby has many needs that still need to be met. That is why I support the Bill—to raise the money to meet the needs of my constituents. We need a new cardiac diagnostic centre for people in the town because we have such a high level of coronary heart disease. We need improved dental services. There cannot be one hon. Member who does not know of problems with the delivery of good dental care in his or her constituency. We also need better services for people with cataracts—basic ways of delivering services, which can be improved through raising resources and reforming the NHS as we are doing at the moment.
	The Tories' contribution today was shambolic. They have not said that they will match our spending plans, yet they say that they believe in an NHS free at the point of delivery. How will they pay for the expenditure that is clearly needed for an NHS free at the point of delivery? They hide. They do not say how they will do it. They say, "That will be explained in four years' time at the general election"—but that is not good enough. The challenge is on the table. Would Conservatives charge patients for their care? Would they force people into private health insurance?
	We have seen some clues to what the answers may be. We have heard the shadow Secretary of State for Health publicly state that he wants to break the link between the NHS and health care. We have heard the shadow Chancellor talk about a Stalinist NHS. Clearly, that is a message that they want to break up what we have had since—

Christopher Chope: What does the hon. Gentleman think about the 250,000 people who last year had to pay for their health care by using their own money to obtain operations and appointments?

Phil Hope: That almost indicates the Tory mentality exactly. Their answer is not to provide a decent NHS but to offer tax incentives for people who have the money to get a better health service. They want a two-tier health service—one standard for the rich who can afford it and a second-class health service for those who cannot. That is the essence of Conservative philosophy.

Ann McKechin: Is it not the height of hypocrisy for Conservative Members to talk about the rise in national insurance, because last time they were in government they increased national insurance in 1995 but cut benefits? This Government may be increasing national insurance, but they are doing it for the benefit of the whole population.

Phil Hope: My hon. Friend is absolutely right. That is the essence of Labour's approach: a fair form of raising taxation to be distributed equally, so that people in most need do not have to worry about whether they can afford to have an operation, because it will be provided for them through the NHS. Under the Conservatives, people would wake up and say, "Can I afford that operation? Should I put a bit by? How will I afford to pay for my visit to the doctor?" Can hon. Members imagine a Conservative world where people wake up every morning thinking, "I hope I don't fall ill today, because I haven't any money in the bank to pay for an operation"? That may be the Conservative world, but it is not the world that I want to live in.

Bill Wiggin: The hon. Gentleman will understand that those 250,000 people who have paid for their operations are waking up thinking exactly the things that he has just mentioned. I understand why he is so excited about the expenditure that the Government are promising, but if things do not get better, at what point will he recognise that that expenditure alone has not been enough?

Phil Hope: I will know that I do not have to worry when the Conservatives decide to vote for the NHS for the first time in their history—when they decide tonight to walk through the Aye Lobby to support the Bill in favour of a national insurance contribution increase that will fund year on year the kind of health service that we want. This is not just about money. We know that. It is also about reform. I hope that in years to come the Conservatives will walk through the Division Lobby with Labour, voting for a reform of the NHS that will deliver a fair and efficient health service, as well as the money to go with it.
	That will become the test, as my hon. Friend the Member for Gedling (Vernon Coaker) said earlier. When we go to the electorate we lay out the choices, and today we see the choice that they will have. We are not having an election now, but I think that if we were, the Tories would probably have to abstain rather than vote against this Bill, because they know how damaging that decision would be.
	This is a fundamental choice between left and right; it is back to good old politics. This is what we are about: an NHS funded through general taxation—a comprehensive system free at the point of delivery, and delivered according to people's need, not their ability to pay. When the Conservatives walk through the No Lobby they will be saying, "Look after yourself." That is the choice. It is a simple choice. Strangely enough, the Liberal Democrats will vote with us, despite the contribution of their spokesperson earlier—and I know that the Conservatives will vote against. I know that people in my constituency will welcome the fact that we are making a historic decision, and I am proud to be part of it.

John Maples: It is always interesting to listen to somebody describing one's party's policy when they are getting it so comprehensively wrong. If the Conservatives wanted to do as much damage to the NHS as the hon. Member for Corby (Phil Hope) says, why did we not privatise it or start charging people when we were in charge? The fact is that we did not.
	The hon. Member for Gedling (Vernon Coaker) put his finger on what the debate is all about. Will the Government's dramatic increase in health spending—from £60 billion to £100 billion—show up in better health outcomes? He said that it will, as though it were a given. I would say that the crucial test is whether it does or does not.
	The issue within the health service is clearly a lack of capacity. We see that in waiting lists, rationing and poor health outcomes compared with a lot of other countries. That is partly due to the fact that we spend less money than comparable countries, but it may have something to do with the model or the system by which we turn that money into health care.
	The Government ought to think about the example of Scotland. In Scotland, health spending is at the level of our main European competitors in this regard, but the outcomes and waiting lists are not that much better. One must ask what is going wrong there; why is that extra money not being turned into better health outcomes? Will our model use this enormous increase in spending efficiently? If it does, we will have as good a health service as France, Germany and Holland, which are the most interesting countries to compare us with. If it does not, it will throw into question whether the model to which we have been wedded for many years is the right one.
	The Government have produced an interesting combination of a massive increase in money and a reform of the way in which that money is spent within the health service. It is a change from when I used to shadow on this subject for the Opposition in the first years of the Government, when they were doing exactly the opposite of what they are proposing to do now, in terms of the using the driver of the internal market. It is an interesting combination and, I say to my hon. Friends, it may work. We all have doubts about whether the system can deliver, but it may work.
	My belief is that the jury is out and will not be back for three years or so. We have had three years of quite large increases in health spending. By the next election, we will have had another three, making six. If at that time we are seeing far better outcomes, the Government will have been proved substantially right in the way in which they have handled the issue. But if, by the next election, we are not seeing dramatically lower waiting times, better health outcomes and less rationing, the Government and their supporters will have to examine whether the model they are using to turn the money into health outcomes is the right one. It is an interesting experiment, but I have my doubts.
	One problem is that there are huge supply-side constraints within the health service, at least in the short term. In the long term, one can train more doctors and nurses and build more hospitals. In the short term, one cannot. The proposal could lead to health sector inflation, about which the Government must be careful. They could spend all the money on increasing everybody's pay and have no additional outcomes. They could also introduce an enhanced role for the private sector on the supply side of health care. There may well be greater flexibility and less short-term constraint there than in the public sector.
	The NHS is very good at controlling costs at a macro-level—largely because the Chancellor decides how much money will be spent—but not at a micro-level. This will be the crux of the issue.

Stephen Ladyman: The hon. Gentleman is one of the more thoughtful Conservative Members and I accept his goodwill in this matter. But does he agree that the logical conclusion of what he is saying is that the Opposition should support the Bill, to give us the money to see if our modernisation programme works, while possibly making proposals to amend the modernisation programme? To deny us both the opportunity to modernise and the money to do it with is nonsensical.

John Maples: The Government will get a lot of support for what they call their modernisation proposals. But it is a bit much to expect the Opposition to support the Government over a stonking great tax rise that is in breach of their own manifesto. There is only so far I am prepared to go in helping the Government to make their case.
	There is little choice within the NHS for patients or GPs. In the private sector, choice is what drives efficiency and quality because it produces competition. That cannot happen in the NHS, so we try to create proxies for it. The Government have created some interesting proxies that are similar to what we did some time ago; their supporters will argue that they are different. They are trying to create proxy drivers for efficiency and quality in outcomes, which are missing, by definition, from a nationalised and Government-run service.
	One other concern that I have is what in the jargon is called "turbulence". The Government are trying to get a hugely increased amount of money turned into health care: something that has never been done before. Very senior civil servants who are friends of mine say that they have never done it before, and that it is difficult to get 7 per cent. real terms increases in spending through into the front line. At the same time as doing this—and while introducing a new way in which money moves around the system to create incentives—there has been a huge reorganisation, with the creation of primary care trusts and strategic health authorities as well as new monitoring organisations and their merging.
	At the moment, health authorities are being abolished and strategic health authorities and primary care trusts are being created. In my constituency—other Members will have noticed this as well—for the last six months, people have been concerned about what job they will do and whether they will still have a job when the authority is abolished. When they do get a job, they spend the next six months setting up the organisation, hiring the staff and ensuring that the working methods and protocols are in place. Those very people—particularly the senior managers in the health service—who will be responsible for driving the money through into health care have been massively distracted over the last six months and are likely to be so distracted over the next six months.

Phil Hope: Like my hon. Friend the Member for South Thanet (Dr. Ladyman), I welcome the thoughtful approach of the hon. Gentleman. Our dilemma is that if we are to achieve the increases in spending needed to deliver real health care, we require leadership. He has given an academic view; he stands back and says it will be interesting to see whether the model works or not, and we will decide in three years' time. Does he agree that we have to show leadership, and that we as a country must show that we want the spending and that we want those NHS managers to deliver? We need the managerial ability to drive the measure through. It is not an academic exercise in which we can make our minds up at some point in the future. It requires real leadership, which the Government are giving to the NHS.

John Maples: I agree that we will require effective management to turn the money into health care. That is what I have been trying—perhaps rather laboriously—to say. I am concerned that those very managers will be distracted by the change in the bureaucracy and the structure of the health service that has been going on for the past six months and which is likely to take another six months, or longer, to bed down. However, I agree completely that management may well be the key.
	I want to refer to the "but if". If the plan does not work, people will have to be prepared to look at other ways of working. Ours is the only OECD country of which I am aware—certainly the only advanced European economy—that uses this model for funding and running a national health service. Clearly, it has attractions; the primary attribute, of which we are all in favour, is that it provides care free at the point of use on the basis of need. But anyone who pretends that there are no problems with the system, that some people's needs are not more easily met than others, or that some of the rationing is not very arbitrary, is pretending that there are not flaws in the system, which there are.
	My friends and colleagues who are Members of Parliament in Germany, Holland or France do not have weekend surgeries and postbags full of complaints from people about the time they are waiting. It is worth looking at how others do these things. We ought not to treat this subject like religion—something that you either believe in or not. We are looking for an effective way of turning a citizen's money, however it is paid—whether through taxes, social insurance or whatever—into the best possible health outcomes.
	There has been much trashing of the United States system, and I do not advocate it. What is wrong with the US system is that it is very bad for the poorest third of the population, but it is jolly good for the other two thirds. If you are rich, there is no question but that the United States is where you would choose to be if you fell ill. The US has a self-funding and classic insurance system that wealthy people tend to use. In the middle, they have developed health maintenance organisations, which are extremely interesting. They ration health care, but do so openly. The system involves the money that a family spends as an insurance premium; whether one pays it as a premium or in tax seems a relatively minor detail. However, health maintenance organisations are interesting. They present the health care that they are going to provide openly and honestly.
	That model is worth looking at, but a yet more interesting one is the social insurance model that Holland, France and Germany use in one way or another. In those countries, such issues seem not to be as political as in Britain, in that they do not bother their elected representatives quite so much. The model allows some choice and gets more money into the system. When people can see money going directly into health care, they are willing to pay more than if the Chancellor takes the money in tax and then decides how much he is going to spend on health care. In other words, when the arrangement is more direct, people are prepared to pay more, and the service can still remain free at the point of use. That said, it should be pointed out that our health care system—and those of other countries—does make charges, but basically it is free at the point of use.
	Under that model, rationing does not disappear, but it is more open. Other things being equal, the more money spent, the less rationing there will be. However, it is a fallacy to imagine that it will disappear altogether, and that we can eliminate waiting times completely and create a health service that is prepared to provide any drug that anybody wants. Drugs are becoming incredibly expensive.
	If we are to go down this route—I agree that it is worth looking at—I should like to adopt the model used by Germany and Holland, in which people can contribute to several social health funds. At the moment, we spend about £60 billion a year on health care—a 10 per cent. levy on everybody's taxable income produces roughly that sum—but we should consider a system in which people's taxes are reduced by 10 per cent. Here, the "straw man" of the £60 or £100 a week cost arises. The idea is that, if the sum is being paid as an insurance premium, it is not being paid in tax, but we should consider a system similar to that suggested by the Liberal Democrats, under which a 10 per cent. levy on people's taxable income is put into the health fund of their choice. It is at this point that I part company with the Government's thinking. Under my suggested model, the national health service would become one such health fund, and other organisations—the Confederation of British Industry, the Trades Union Congress, insurance companies—could set up others. People would have a choice. The Government would lay down the minimum standard of care to be provided, but people could top it up if they wanted to. Again, that should be done as a percentage of one's income, so that equality can be maintained.
	One thing that I do not like about the health service is that, although we pay a lot of money in tax for our families' health care, we cannot choose to pay a little more in order to get a bit more of a service; we must either take it, or leave it. If we leave it, we have to pay for the whole thing over again out of private resources, while not getting anything for the taxes we have paid. A social insurance system would combine the two incentives. The Prime Minister and the Minister have mentioned scare stories about the £60 a week that employers pay under such a system, but as I have pointed out, projected health spending of £100 billion a year will amount to about £1,700 per person per year, or about £7,500 for a family of four. In other words, we are paying a hell of a lot of money for health care, and we want to know that the existing system for delivering it will use the money to maximum effect. Describing the costs of other health care methods as additional to, rather than a substitute for, current costs, is a straw man. It is not an honest way to argue.

Stephen Ladyman: The hon. Gentleman quotes the Dutch model, but as chairman of the all-party group on the Netherlands, I can tell him that the biggest issue in this week's Dutch general election—excluding the death of Pim Fortuyn—is long waiting lists in their health care system. The Dutch perceive that their health care system does not work. Social insurance is not the panacea that he perhaps suggests.

John Maples: Nothing is a panacea, and we will never be prepared to pay enough for the health care that we need at a particular point. If I had been making this speech three or four months ago, I would have suggested that my alternative is a better one. Given that the Government have pursued a policy whereby a huge sum of money is being raised in order to make a difference, my question now is whether the medium of the national health service can translate that into an equivalent increase in health care. If it cannot, it is worth looking at other systems, and it would be sensible to consider the one that I am describing.

Evan Harris: The hon. Gentleman is right: we need a grown-up debate, and it is wrong to argue that private health insurance will cost X amount, implying that it is more than people are paying in tax. However, as he will recognise, the problem that many have with alternative models concerns equity. It is difficult to find a more equitable way of providing health care than the current system, which, arguably, should prove more efficient thanks to the lack of cost to the administrative system of national and social insurance.

John Maples: If there is a trade-off—I am not sure that there is—we are paying a high price for it. We are enforcing a system on those who would perhaps pay more for their health care, and reducing that care to a level that everybody is prepared to pay for. I want people to be able to top up a minimum guarantee from their own resources. There are many health procedures that people want to undergo—the hon. Gentleman is a doctor, so he knows far more about such matters than I do—but which are not strictly necessary for their health. Perhaps such people are prepared to pay a little extra for such procedures, but at the moment they cannot.
	I have not heard continental social insurance systems being criticised as inequitable. I would imagine that my proposed system would have exactly the same equity as the national health service; however, it would provide rather more choice, and enable people to spend more money.

John Mann: rose—

John Maples: Perhaps I can move on. None the less, I agree that the jury is out on the matter. We need to wait two or three years and see whether the Government are right and their system works, and I am simply describing the system that we should consider if it does not.
	I welcome the Government's change in attitude to the private sector. When I was shadow Secretary of State for Health, we discussed the abolition of various mechanisms such as local health plans, in which local hospitals are used for various purposes. Money certainly did not follow patients under those plans, and I am glad that they are being reinvented. I genuinely welcome that change of heart. Choice in the commissioning of health care will drive improvements in efficiency and quality, and replicate the drivers that one normally expects to find in economic mechanisms in the NHS. I am also glad that the purchaser-provider split is being retained. Internally, at least, that will offer a choice between providers.
	The Government abolished fundholding on taking office, and in a sense they have recreated it through primary care trusts. My worry about such trusts is that they are a bit too big. I hope that some flexibility will be allowed internally, so that they will not corral every GP into exactly the same choices. Allowing such flexibility is more likely to drive up efficiency and quality.
	The Government will need private sector involvement on both the supply and demand side if they want to meet their targets and ambitions, and we certainly share their ambitions. On supply, we must recognise that many elements of the health service are already provided by the private sector. The drugs industry and the medical supplies industry are private, and hospitals are now built—and in many cases operated—by the private sector. In fact, GPs are private sector contractors to the health service. We as a nation spend well over £1 billion a year on over-the-counter drugs.
	One business in my constituency owns several MRI and CAT scanners, and operates them on behalf of hospitals on various bases. Although every head of radiology wants a scanner, some hospitals do not need constant access to one. Given that they cost £1 million, why should such hospitals buy one? That business will supply such a scanner for, say, two days a month. Such scanners are mobile. The business will staff them, or hospitals can staff them themselves. Hospitals can pay so much per week, or so much per episode. The private sector provision of capital is likely to prove more efficient than the purchasing by small and medium-sized hospitals of their own facilities. That system could be replicated across many clinical services, such as pathology. Unlike large hospitals such as the one across the river, some others might not be able to justify a full-scale pathology service. That is another example of how huge capital expenditure items can be more productively shared among several hospitals.
	Cataract surgery is the fifth most common surgical procedure. It accounts for nearly 4 per cent. of admissions, 5 per cent. of waiting list admissions, and 11 per cent. of total waiting list days. The average wait for a cataract operation is 203 days. Given that most people who are in need of a cataract operation are already pretty old, that constitutes a significant part of their life expectancy. Subjecting people to such waits is scandalous. There is clearly a capacity constraint, whether through choice, or because certain fundamentals are difficult to effect. Commissioning authorities should get together and say, "Let us commission a cataract service from the private sector, which will perform a certain number of operations at X cost per year." That way, perhaps we can eliminate the scandal of the 203-day wait.
	The Government could use the private sector to supply health care in several similar areas. The Government will have difficulty in turning money into health care because of the serious short-term supply-side constraints that they will face, and they might find it easier to meet their targets by using the private sector.
	Private sector funding could also be used imaginatively on the demand side. Nobody would seriously suggest that private health insurance should be used to provide all health care, but I shall give an example of how it might be used. Ten surgical procedures account for 35 per cent. of all admissions and all waiting list days, and 20 procedures account for between 46 per cent. and 49 per cent. of admissions and waiting list days. A relatively small number of surgical procedures account for a huge amount of the work. That is the old 80:20 rule and—I suppose—it is what one would expect to find, but it is surprising that it is true on examination of the figures.
	Given those figures, we might do a lot to reduce waiting times and lists by giving a modest tax subsidy to a limited private insurance subsidy that covered only those operations. That would be sensible for the Treasury to consider. I understand the arguments on private health insurance about dead-weight cost—many people already have insurance, so why give them the tax subsidy?—but the subsidy could be pitched much lower than the cost in lost taxation and still create an incentive. People could be encouraged to spend more of their own money and, in the process, could help the Government to meet their targets by taking some of the pressure off the NHS.
	I am glad that we have Treasury Ministers on the Government Front Bench, because I have another idea to suggest. One of the problems that we face is that people are not saving enough for their retirement. When I worked at the Treasury, it was one of the main concerns of senior officials that people are heading for retirements during which they will cost the state a lot of money. However, we could allow people who have significant pension funds to spend some on private health care. Some people have pension funds considerably in excess of what is needed to keep them off state benefits, and we could encourage people to have a retirement fund not only for income purposes but for residential care or nursing care in their old age. If they need an operation or a hospital stay, they could also be allowed to spend money from their fund on that.

Ann McKechin: The hon. Gentleman has expressed some interesting opinions. However, one of the difficulties faced by the NHS is the lack of specialist staff, especially consultants. He mentioned cataracts and the length of the waiting lists in particular, but consultants in Glasgow are already tempted to move to other areas where they are likely to get more private work. If we spend too much time focusing on the needs of people with private insurance, it skews the health service away from those who are most in need, which is those who suffer from the worst poverty.

John Maples: I do not know about the Glasgow example, but the supply of health services is probably more flexible and less constrained in the private sector than it is in the public sector, at least in the short term. The Government have decided to chuck a huge amount of money at health services, but because of the constraints they will find it difficult to turn the money efficiently into health care. I do not argue that all the money should be spent in the private sector, but in the Secretary of State's statement on delivering the NHS plan he clearly envisages purchasing services from the private sector. By giving some examples, I hope to suggest an efficient way to spend a marginal amount of the money. The supply-side constraints are less in the private sector, although in the long run there are constraints on both sectors, because the problem is the number of consultants and nurses. Nurses can be trained relatively quickly, but it takes about 15 years to become a consultant.
	It will be an interesting experiment to see whether the Government's model and the increase in health spending will work. We will not know for two or three years whether they will. We obviously all hope that the Government get the outcomes they want, but if the experiment does not work we will need to recognise that the model will have been tested close to destruction. Those who have been its passionate advocates will have to be prepared to look at other systems; and I suggest that we should look to our continental partners, who are not all completely crazy, to offer systems that differ from ours. I am glad that the Government are encouraging the use of private sector suppliers and encouraging private sector demand. They are likely to find that a less constrained and more productive way to spend some of the money than trying to increase capacity at the margin in the NHS.

John Lyons: I welcome this debate on national insurance, but I do not welcome the fact that it has been used to rubbish the NHS. That is both unfair and untrue. Since the announcements on national insurance, I have had the opportunity to speak to my constituents. I admit that they have not queued up to tell me that the Chancellor is brilliant, outstanding and has done a wonderful job on national insurance, but they have all accepted that it is a fair and decent way to pay the extra 1 per cent. Many constituents have also welcomed the fact that the money will go to the NHS.
	My constituents know that the NHS is a key service for them and they want to preserve and defend it, so that it can flourish. They also know that spreading the cost widely is fairer. More people in my constituency now pay NI because more people are in work since 1997. Many of the young people among them are happy to pay those NI contributions because they are now in work.
	The health service must be kept at the top of the agenda. I declare an interest in that I have spent a lifetime defending the NHS and fighting on behalf of its staff, so I have some bias on those matters. As a member of a health board in the past, I know that staff have been struggling against difficult circumstances across the health service for a long time, whether in acute services, primary care or elsewhere. The staff have fought hard to try to turn the situation around.
	I am not the sort of person who goes around saying that everything in the health service is wonderful, but some brilliant work is being done. We need look no further than last Friday. The people dragged from the carriages at Potters Bar were treated by the best of our health service, and they were well looked after by firemen, ambulance workers and health care workers.
	I welcome the NI changes, but we must ensure that the money raised goes to front-line services so that people can see real value for the health service from what has been asked of them. The money should be spent on investment in consultants, nurses and nursing auxiliaries to ensure that we have people in place to provide and deliver a proper health service for our constituents. However, the time delay in training staff, whether nurses or consultants, is a problem. Major changes cannot be made immediately, even though they are desirable politically.
	It takes time for staff to qualify, but progress has been made. In 1997, 21,370 consultants were working in the NHS. By September 2001, the figure had risen to 25,690—an increase of 20 per cent. or 4,320. That should not be the end of the matter; I want us to build on those figures. Everyone will agree that an increase in the number of consultants will have a knock-on effect on a range of services. It does not matter how many nurses are employed, if there are not enough consultants to treat patients, thus reducing waiting times and waiting lists, we shall be stuck—we can achieve nothing. The first thing that we need is more consultants—that is important. Thereafter, by all means, let us have more nurses and auxiliaries to treat the flow of patients. I am not making a political point. Any Government would be proud if they could achieve that result—I am sure that no Member would deny it.
	I have been a Member of Parliament for only 10 months, but during that time I have tried to listen to people and to my constituents—irrespective of their political view—on matters such as the health service. Across the political spectrum, people want one thing: a national health service equipped for the 21st century. They want a national health service that will deliver in a modern way, but they all realise that we cannot achieve that by wishing—we need proper investment. That is the key. Without that investment, we can forget about everything else. The national insurance changes give us, properly, the funding for the investment that people want.
	My contact with the health service, especially during the 10 months since I became a Member, has done nothing but reinforce my awareness of the importance of the NHS and of its centrality to people's lives—along with the police, the fire service and so on. Our constituents value the staff of the health service. People who have been in hospital always talk about the kindness of the staff and about the quality of the care that they received. The public realise that NHS staff are delivering a first-class health service.
	Members who oppose investment in the service need to consider their position as regards their constituency and the services provided there. People need reassurance—especially those working in the service. The rubbishing of the service and of the people who deliver it must stop; it is undermining and destroys morale. We should change our political attitudes in that regard.
	Our constituents think that they are well served by the people who work in the service. Today, my right hon. Friend the Home Secretary was presenting awards to the outstanding public servants of the year. We need to keep making such awards, especially for health workers, to let them know that we trust them and, above all, that we value them and their commitment to public service.
	We must tell them that our confidence in them will be matched by increased investment and increased training to allow them to fulfil their potential in the health service. We need to break down some of the old barriers, especially for nurses or auxiliaries who, because they are paid at a certain grade, are not allowed to undertake certain work. We should find the means for a spread of work for nurses and auxiliaries—we should use them to the best of their ability.
	People want a real return for the investment—a qualitative change in many services. That can be achieved. We have taken the right approach; it is bold and open and has been well received by the electorate. At the end of the day, that is what counts.

David Ruffley: I am glad to be able contribute to this good-natured and thoughtful debate, with good speeches from Members on both sides of the House, especially my hon. Friend the Member for Stratford-on-Avon (Mr. Maples).
	The Bill gives us the chance to meditate carefully on the contributory principle of social insurance that underlies the national insurance fund. On Budget day and since, we have heard much from Labour Members about William Beveridge—much has been done in his name. The reality is, however, that during successive decades and under successive Governments of all political persuasions, there has been an erosion of Beveridge's concept of genuine social insurance and the contributory principle, to the point where those ideas have become highly confusing and confused.
	I regret that the process has continued in the Bill, whose author, almost inevitably, was the Chancellor of Exchequer—Complexity Brown—a man who unfortunately, Budget after Budget, not only welcomes confusion in the national insurance and taxation systems, but does much to generate even more confusion in those systems.
	The essential element of the contributory principle is eligibility for certain benefits—in essence, at present, jobseeker's allowance, incapacity benefit, and retirement and widow's pensions—based on compulsory contributions from employees, employers and the self-employed. The system covers about 20 million employees, about 1 million employers and about 2.3 million self-employed—a great many people—all of whose national insurance contributions are paid into the fund. Until now, only a small percentage of those contributions has gone to NHS spending.
	Figures produced by the Library show what the regime was like before the Budget announcements and before the Bill was introduced. Just over 1 per cent. of an employee's earnings between the primary threshold and the upper earnings limit was devoted to the NHS, and about 0.9 per cent. of the earnings in respect of which employer's contributions were paid. Most of the national insurance fund covers contributory benefit pay-outs.
	The national insurance fund operates on a pay-as-you-go basis, so that today's contributions by today's workers cover and finance the current outgoings paid to today's benefit recipients. The problem is that there is little direct financial relationship between what an individual puts in over a lifetime and what that individual may or may not pull out by way of benefit. That point was powerfully and brilliantly exposed in the fifth report of the Select Committee on Social Security in June 2000. The Committee was worried about the future of the contributory principle and what it actually meant for the public in accounting and practical terms.
	My contention is that the current national insurance system is light years away from the model of social insurance that Beveridge envisaged and that Ministers so assiduously pray in aid. Beveridge thought that the system should be fully funded. That is clearly not the case in the current national insurance system. He envisaged a fairly low flat rate for all contributors, thus allowing—in his view—middle and higher-income earners to make their own voluntary, private provision on top. They would have been able to do that because the flat rate was relatively low. That is not the case with the current system.
	The fault does not lie merely with the Government over the past five years, but it has continued under them and it makes the system very different from Beveridge's model of social insurance. The problem with Beveridge's system—its corruption, some would argue—had much to do with the fact that, at an early stage, the Government of the day did not allow the social insurance fund to mature, which would have taken about 20 years of contributions. Instead, full pensions were paid at an early stage and swiftly resulted not in a fully funded insurance system but a pay-as-you-go system.
	Other factors beyond the Government's control have, of course, contributed to the corruption of the original idea. In part, it has been caused by the change in women's employment in the work force, which we all celebrate but which Beveridge did not envisage at all. His view was that the man would continue to make the contributions and the wife would stay at home. Another example is life expectancy. When social insurance on a fully funded basis was talked about at the end of the 1940s, the life expectancy of a worker on retirement was one year. It is now in excess of 20 years. Those are changes that make a fully funded model very difficult to deliver. We now have a mish-mash in which what is paid into the fund, and what is received out of it, are, to say the least, untransparent transactions.
	Another point about national insurance and the contributory principle properly defined was that there would be less reliance on means-tested benefits—under the contributory principle, means-tested benefits should have declined. In the last 40 to 50 years, of course, the reverse has occurred. At the end of the 1940s, more than 60 per cent. of Government social security expenditure was on contributory benefits, and only 13 per cent. was on means-tested benefits. Today, contributory benefits make up 47 per cent. of spending, and means-tested benefits have grown to more than a third of the total.
	Much of the growth in means-tested benefits is attributed to the failure of many people to qualify for the contributory national insurance benefits. It is also due to many new means-tested benefits: rent and rate rebates or the new housing benefit and council tax benefit. Undoubtedly, successive Governments have not done much to clarify in the public mind what should be paid out in relation to what is paid in by an individual payer of the stamp or national insurance contribution.
	How many of our constituents, if asked about the Bill and about the contributory principle, would understand that the bulk of national insurance does not go to the national health service? Research undertaken by Dr. Bruce Stafford in 1998 for the then Department of Social Security produced some interesting findings. He discovered an individualistic approach underpinning views of the national insurance fund and the contributory principle:
	"Generally, the respondents believed that through their contributions they had secured a contract with the state that gave them a 'right' to contributory benefits. In some instances, respondents thought, incorrectly, that their contributions were paid into a 'personal kitty', which was available when needed, and this was linked to the notion that contributory benefits 'top-up' other state benefits and/or private insurance."
	In giving evidence to the Social Security Committee, the Trades Union Congress also complained about the lack of transparency in relation to the national insurance contribution system. When it was campaigning against the introduction of jobseeker's allowance—when it was cut from 12 months to six months, in relation to contributory benefits for the unemployed—it was surprised by the public's complete lack of understanding about the working of the contributory system. It blamed
	"the complexity of national insurance and the widespread ignorance of its main features".
	This may be the first time that I have agreed with the TUC, but it is right in that regard.
	Increasing evidence exists that the link between contributions put in and benefits drawn out is getting vaguer year by year, Budget by Budget. The restrictions on which contributions can be counted and when they can be counted will often mean that someone who has paid national insurance at the lower end will still end up not qualifying for benefit. In 1995–96, the then DSS estimated that there were about 4 million people, mainly those with low earnings, who paid standard or self-employed contributions for short periods during the year who did not obtain a qualifying year for basic state pension, even with the benefit of credits adduced to them. At the other end of the scale, much higher earners make a similar complaint about what they get for what they put in.
	From whichever end of the income scale one looks at the issue, the idea of national insurance contributions as genuine social insurance is becoming outmoded. As Professor Disney of the Institute for Fiscal Studies has observed, national insurance is merely a device for raising money because people dislike the idea of paying income tax. He said:
	"They"—
	the public—
	"think that if they pay contributions somehow they have a greater entitlement than if they pay income tax . . . You can make the argument 'I have paid contributions all my life, I ought to get more pension'. Why not make the same argument 'I have paid income tax all my life. Why do I not get the pension I deserve?' To me they are almost identical statements."
	That observation reflects what successive Governments have increasingly done. They have always altered national insurance contribution rates and the benefit conditions attached to them without strict adherence to any kind of actuarial calculation. In short, although the idea of benefits as a right might be popular with some members of the public, it does not have much basis in economic or accounting reality.
	It seems that it is high time to explode the myth that the current national insurance regime is "insurance". To be much more honest, the Government should admit that we have a social security tax—a straightforward redistribution mechanism—to get contributions from those in work and to make payments to those outside the labour market. I would not advocate or support such a system but that is what the new Labour Government and the Chancellor are perpetuating with every Budget that they pass. It is incumbent on the Chancellor to own up and admit it.
	I have described the manifest confusion in concepts of national insurance, but that is not the only confusion attendant on the Bill. There was much confusion in the presentation of what was undoubtedly a tax increase, not a genuine national insurance contribution increase. The hike of 1 per cent. in alleged national insurance contributions together with the removal of the upper earnings limit in relation to that rise equals a tax increase identical to a 1 per cent. increase in the basic rate, a 1 per cent. increase in the standard rate, and a 1 per cent. increase in the top rate of income tax, with increases in liability for many of the categories to whom my hon. Friend the Member for Buckingham (Mr. Bercow) drew attention—nurses, police inspectors, firemen and many other public sector workers.
	The Institute for Fiscal Studies is in no doubt that what we are talking about, effectively, is a back-door increase in income tax rather than any form of contribution. It says that the Government's increase in national insurance is,
	"for somebody whose sole source of income is from paid employment exactly like increasing the starting, basic and higher rates of income tax by 1 percentage point."
	Many sage observers in the City and in the newspapers have made the perfectly legitimate and far-sighted point that the increase opens the door for increases further down the line—from 1 per cent. to 2 per cent., 3 per cent. or 4 per cent.—gradually working up to a much higher increase in the top rate of tax by the back door. What we have seen in the Bill is merely the thin end of the wedge. On 20 April, The Economist followed the same line of argument and said:
	"NICs are barely distinguishable from income tax, except that they are levied only up to a ceiling of around £30,000. There is no ceiling on this extra new percentage point. So Mr. Brown has not raised 'income tax'; he has simply changed the incidence of NICs so that . . . they are exactly the same thing, and raised that instead."
	The measures in the Budget and the Bill are in breach of the spirit of statements made by Her Majesty's Ministers at the time of the last general election. My favourite is from the Prime Minister in response to a question from Jeremy Paxman on "Newsnight" on 22 May and just before polling day. Mr. Paxman said:
	"I am merely asking why you could give this guarantee"—
	not to abolish the national insurance ceiling—
	"last time but you can't give it this time and whether any reasonable person wouldn't suppose that you therefore propose to increase national insurance contributions?"
	The Prime Minister replied, "They shouldn't" suppose that.
	Then, of course, we had the all-time classic of its kind from the now Secretary of State for Trade and Industry. On the "Powerhouse" programme on 29 May 2001, she said:
	"We've got no plans at all to raise that ceiling on National Insurance contributions . . . It is not going to happen."
	The Select Committee on the Treasury also had some sage comments and judgments to pass on the Budget and the proposals in the Bill. I sit on the Committee and we observed the uncapped nature of the 1 per cent. rise in NICs and asked Treasury officials what they were up to. They said that the definition of the upper earnings limit on NICs is
	"the point at which 11 per cent. stops and 1 per cent. starts with respect to employees."
	That view seems to be greatly at variance with the previous, widely accepted and traditional definition of the upper earnings limit, which was that it was the maximum amount of weekly earnings in respect of which employee contributions are payable. The Committee went on to suggest rather insightfully:
	"To insist, therefore, that the Upper Earnings ceiling remains intact seems to us mere sophistry. We note this departure from previous practice which could be viewed as a move of the national insurance contribution system towards that of general taxation."
	That is the main thrust of my argument.
	We have a national insurance system in which there is no direct relationship between what individuals pay and what it pays out. It is true that the Bill will direct more funds into the national health service. Conservative Members believe that more money should be put into the national health service, but that extra funding must be accompanied by reform. The Bill does not talk about reform at all. The extra financing must also be carried out with clarity and honesty, and the Bill does not do that.

Chris Bryant: Will the hon. Gentleman give way?

David Ruffley: I hope that the hon. Gentleman will forgive me, but I am coming to the end of my remarks.
	Honesty, transparency and clearly delineated reform are not characteristics of the Bill or any other part of the Chancellor's legislation. Unfortunately Complexity Brown has complicated an already confused national insurance regime by a further damaging blurring of the distinction between general taxation and national insurance contributions.

Jon Cruddas: I briefly want to consider the Bill in terms of two general criticisms levelled against the national insurance increases announced in the Budget. The first is that it marks a break with Government strategy since 1997, and the second is that it compromises the national insurance fund through its extra financing of the NHS.
	The Bill enacts the national insurance elements signalled in the Budget. From April next year, the primary threshold for the level of earnings at which national insurance contributions begin will be frozen at £89. Employees' contributions will be increased from 10 to 11 per cent. Employers' contributions will be increased by 1 per cent. to 12.8 per cent. From next year, the 1 per cent. increase will also apply to earnings above the limit. A person on median earnings, or £21,400, will pay £3.70 extra each week.
	When considering those proposals, it is worth remembering that, between 1979 and 1997, NICs were raised for most workers from 6.5 per cent. to 10 per cent. As my hon. Friend the Member for Gedling (Vernon Coaker) said, at the same time, there were no discernable increases in what might be described as the social wage. Indeed, when the increase from 9 to 10 per cent. was announced in 1995, it worked alongside cuts in national insurance support—down to six months—for unemployed workers.
	In contrast, these national insurance proposals work alongside the developing tax credit regime to ensure that a two-child family with one adult in full-time employment on average pay will be nearly £4 a week better off even after the freezing of personal allowances. Under the Government's proposals, tax will rise as a proportion of national income from 37 per cent. in 2001–02 to 38.3 per cent. in 2005–06. Even then, average European Union tax takes are 3 per cent. higher. Moreover, our main rate of corporation tax is lower than in any other major European country. For small businesses, the situation is even more favourable.
	The response to the revenue-raising proposals announced in the Budget was very interesting. Many commentators assume that the Budget marks a rupture with the patterns of economic management and investment sustained by the Government since 1997. That argument is worth addressing, because any specific proposals, such as these for national insurance, must be analysed in terms of the general strategy that underpins them.
	I prefer to consider the national insurance proposals in terms of the evolution of Government strategy since 1997 rather than as a form of rupture that began on the day of the Budget. In that sense, four core elements in Government economic strategy are identifiable since 1997. First, the priority of efficient macro-economic management means that we have witnessed the lowest interest rates for 40 years, the lowest mortgage rates since the 1950s and the lowest inflation rate since the early 1960s. At the same time, debt estimates stand at a healthy 31 per cent. through to 2004. Secondly, we have attacked unemployment through our active labour market policy and work subsidies. Using those two strategies, the Government have dramatically altered the trade-off between levels of unemployment and accelerating rates of inflation. In one sense, that is one of the greatest hallmarks of their activity since 1997.
	Thirdly, we have attacked poverty through re-incentivising work and by helping pensioners, especially poorer ones, and young families. Fourthly, I refer to our historic refinancing of public services. The effects of fiscal drag, debt repayment and reductions in unemployment have allowed us to refinance the public services with some £36.1 billion extra of annual cash expenditure by 2003–04 compared to 2000–01. As such, since 1997, we have witnessed an incremental strategy at work that systematically redistributes while simultaneously locking in stability and comparatively high growth rates. Rather than breaking with that incremental strategy, the Budget develops it further. The hallmark is its continuity in terms of stability, re-activating the supply of labour and confronting poverty and refinancing public services.
	Within that overall strategy, three areas stand out in the Budget. The first is the way in which our comparative productivity shortfalls have moved centre stage in terms of our economic strategy, which I very much welcome. The second is the announcement of £33.5 billion of investment in the health service between 2003–04 and 2007–08, which, again, I very much welcome. The third is the acceptance of the revenue implications of such a strategy and, therefore, the national insurance proposals that we are discussing today.
	The national insurance elements will raise £7.9 billion in 2003–04 and, alongside that, the freezing of allowances will raise £700 million. Despite those revenue-raising mechanisms, the Red Book projects that general Government net borrowing will be 1.1 per cent.—or some £12 billion—for next year, which is the end of the current comprehensive spending review period, and will rise further through the next CSR period.
	I mention that briefly to highlight a prospective problem in the development of the overall strategy of refinancing public services—namely, the growth and stability pact that might interfere with this incremental domestic strategy and break the link with public service refinancing.

Adam Price: Before the hon. Gentleman moves on to discuss the growth and stability pact, will he assist me? I do not have his mastery of the figures, but will he explain how the 1p cut in the basic rate of income tax in 1999 and the 1p increase in employee and employer national insurance contributions reflects a continuity in Labour Government policy?

Jon Cruddas: I tend to perceive three distinct phases, which gradually paint a picture. Furthermore, it is possible to see evolution in the devolutionary strategy. First, after 18 years of Tory government, the focus between 1997 and 1999 was on reinforcing our bona fides in respect of general economic management. That moved us into a second phase—the three-year comprehensive spending cycle, which ensures real-terms reinvestment across all public services and, through the effects of the tax revenues of fiscal drag, retains healthy balances on the accounts to allow for that investment. The third phase, which was signalled in the Budget, is to accept the revenue consequences of another three-year real-terms refinancing of the health services, and at the same time to retain the core macro-economic conditions that allow real-terms growth across all public services. That strikes me as an incrementally radical agenda that systematically confronts poverty and inequality while retaining healthy economic conditions within which that radical agenda operates. I see no contradictions.
	The growth and stability pact might interfere with the incremental domestic strategy and break the link between public services reinvestment and our revenue-raising initiatives. In so doing, we might compromise the reason why the public elected us last year, which I believe is also the reason why they will accept the national insurance contributions changes, in that they are being levelled so as to refinance our public services systematically. That link could be broken if we were seen to use the receipts to finance net balance at the expense of those investment plans. I therefore welcome the national insurance estimates and the way in which they will allow us incrementally to deliver the agenda on which we were elected.
	The second argument—that the national insurance proposals signal a rupture with the past—relates to the historic role of the national insurance fund itself. The argument runs that, in contrast with the original assumptions behind the contributory principle, the new proposals, with their explicit link to the national insurance fund, weaken the link between contributions and benefits by cross-subsidising public service investment, which should come out of direct taxation. At the same time, because national insurance contributions are a payroll tax, the proposals act as a disincentive to employment.
	However, the national insurance system has never been the wholly earmarked social insurance system that such arguments imply it was: for example, apart from a brief period between 1988–89 and 1993–94, there has been a Treasury supplement to the fund from the Consolidated Fund. At the same time, a portion of contributions income is paid into the NHS; the House of Commons Library estimates that, at various times, it has amounted to between 6 per cent. and 17 per cent. of NHS costs, and the figure for 2001–02 is some 12 per cent. of NHS revenue. If we assume that all of the increase in contributions is directed to the Consolidated Fund for use specifically in the NHS, in 2007–08, £13.2 billion from the insurance fund will amount to some 12.5 per cent. of NHS income.
	It can therefore be argued that in a period of massive reinvestment in the NHS in the current CSR period, with £36 billion coming in the next CSR period, the national insurance proposals simply ensure that the proportion of contributory income directed to the NHS remains relatively stable at 12 to 12.5 per cent. Therefore, the proposals continue the principle established in the 1940s of raising resources towards the cost of the NHS through national insurance contributions.
	It seems to me that these initiatives are in turn consistent with the arguments deployed by Beveridge in "Social Insurance and the Allied Services", specifically in terms of the anticipated comprehensive national health service. That is because of Beveridge's continuous emphasis on the link between the provision of social insurance, a national health service and continued paid employment. All his proposals have to be seen in the light of his desire to retain income maintenance. He states on page 8:
	"the Plan for Social Security . . . takes abolition of want after this war as its aim",
	and later he argues that
	"the provision of an income should be associated with treatment designed to bring the interruption of earnings to an end as soon as possible."
	The corollary of treatment was the anticipated form of socialised medicine. It is therefore entirely legitimate to direct an element of contributions to health care, not least because, as the CBI states, workplace absence cost British business about £10 billion in 1999. As for the employment effect, any effect of the national insurance proposals must be seen alongside the totality of initiatives that have helped to reduce unemployment to about 1 million, reactivated much of the labour supply and created about 1.5 million jobs since 1997.
	Overall, I strongly support the national insurance proposals. On the ground in my constituency, Dagenham, we are beginning to see real changes in health provision. A new hospital will be up and running within a few years, and the health authority is working on increased budgets. None the less, the needs of the community are immense: the incidence of heart and lung disease, infant mortality and life expectancy, especially for males, are among the worst in the capital. Yet the new PCT faces GP shortages and a swathe of GP retirements, while health inflation squeezes out its real-terms budget increases.
	In coming years, the proposals will help to deliver the sort of health care that my constituents should receive as of right. The Bill is part of the Government's overall strategy to refinance that care effectively, and I strongly welcome it.

Adam Price: It is usual at this point in proceedings for an unearthly calm to settle upon the debate. Thus far, it has been quite lively. The hon. Member for Crosby (Mrs. Curtis-Thomas) declared, with characteristic chutzpah, that this was a landmark Bill. In a slightly different tone, the hon. Member for Dagenham (Jon Cruddas) has just told us that new Labour is now in the third phase of an evolutionary strategy.

Chris Mole: I think that the person whom the hon. Gentleman has in mind is my hon. Friend the Member for Corby (Phil Hope), not my hon. Friend the Member for Crosby (Mrs. Curtis-Thomas).

Adam Price: I am grateful. My English geography has always failed me, but I am sure that hon. Members will forgive me.
	It should be acknowledged that the Budget represents a welcome change in direction by the Government. Given the comments of the hon. Member for Gedling (Vernon Coaker), it should be said that it is a change for which many people, both inside and outside the Labour party, have fought.
	The Chief Secretary to the Treasury said that the debate was not about whether we need the extra investment in public services. We wholly agree with that assertion—we are glad that the Government have now adopted the view that Plaid Cymru and the Scottish National party have held for some time. The debate is about how that money should be raised, and it is on that that I shall focus my speech, as it is where some of the problems arise. Clearly, we will support the Government on Second Reading, because the investment in our public services is sorely needed.
	The Bill marks a small step forward, but hon. Members will forgive me for believing that half a step backwards has been taken in terms of the mechanism by which the Government have chosen to raise the funds. Despite claims to the contrary, national insurance contributions are relatively regressive. Increases in employer contributions have a deflationary impact on jobs and investment, and that will to some extent eat into the extra investment in the public sector.
	In March, the Deputy Prime Minister tried to justify the use of national insurance contributions for the health service, saying:
	"What people forget is that the health service started off as a payment out of national insurance".
	He forget to mention that he was referring to the National Insurance Act 1911, which created a form of mandatory health insurance scheme whereby all wage earners and employers paid into a scheme, in return for which they received some degree of medical support. Anyone familiar with the novels of A. J. Cronin will know that that was not an entirely satisfactory arrangement, which is why the Attlee Labour Government placed direct taxation at the heart of the funding arrangements for the national health service. The National Insurance Act 1946 contained a partial link to health service funding, but was primarily about funding the provision of welfare benefits such as retirement pensions and sickness and unemployment benefits. A small proportion—it is now about 10 per cent. of national insurance contributions—goes to the NHS.
	As we heard in a thoughtful speech from the hon. Member for Bury St. Edmunds (Mr. Ruffley), the value of contributory benefits demonstrates a breaking of the link between national insurance contributions and welfare benefits. Unfortunately, the hon. Gentleman is no longer in his place. I do not remember who said that the two things that can be said reliably about the national insurance fund are that it is not a fund and it is nothing to do with insurance. That is more the case now than ever before.
	Semantics aside, the increase in national insurance contributions is an increase in taxation. When the Government transferred responsibility for national insurance contributions, the Inland Revenue probably gave the game away, although I need not detain the House too long on that.

Dawn Primarolo: The previous Government believed that national insurance should be transferred to the Inland Revenue, on the basis that it made sense to make some alignments to reduce the burdens on employers that result from some of the mechanisms. It was not a statement of what was to come, but I think that the hon. Gentleman is making some interesting points.

Adam Price: I am grateful to the Minister. One of the things that gives me the greatest pleasure in this place is that I never have to speak on behalf of the Conservative party. I certainly do not claim responsibility for the previous Government.
	I believe that there has been some discussion within Government, or at least some feasibility studies, of the pros and cons of amalgamating the tax and national insurance systems. That might suggest that national insurance contributions, to a greater or lesser degree, are a form of taxation.

Dawn Primarolo: I am listening to the hon. Gentleman carefully and he is making some pertinent points. One of the problems, as business tries to persuade the Government that we should amalgamate national insurance with tax, is the loss of the contributory principle of the national insurance fund, which flags up benefit entitlement. That is precisely the point that the hon. Gentleman is saying is missing. The very thing that keeps the national insurance fund in its present form is the fact that it is contributory and flags benefits.

Adam Price: I am grateful for that clarification. I note that the payroll sub-group of the Government's better regulation task force said that
	"we understand that the really big regulatory gains would come from either combining national insurance contributions and tax into a single charge for those who currently pay both or NICs being shown as a social security surcharge."
	I will happily person the barricades jointly with the Minister to oppose any further erosion of the contributory principle, but I would like to move on to the regressive nature, as I see it, of the national insurance contribution mechanism as it provides for general Government expenditure.
	Generally, national insurance contributions are regressive because workers on average incomes pay a greater proportion of their income on contributions than those on higher incomes. The Chancellor could have abolished the upper earnings limit, but the anomaly of the ceiling would remain. Those earning £31,000 a year face a marginal tax rate of 23 per cent., whereas those earning less have a marginal tax rate of 33 per cent. That is clearly unacceptable for those who support a progressive income tax system.
	To be fair, the Chancellor has been progressive to some degree in the way in which he has dealt with national insurance contributions. Previously, he has raised the lower earnings threshold faster than the upper earnings limit. In the most recent Budget, he introduced the additional primary percentage to operate above the ceiling. That is a partial breach of the upper earnings limit, and we hope that there is more to come. As a recent OECD study concluded, the shift from income taxation to payroll taxes leads to an overall decline in the progressivity of the tax system.
	Labour Members would do well to be aware of those dangers. There has been extremely rapid growth in payroll taxes over recent years. If we include the employer contribution, we find that many people pay more in payroll taxes as a proportion of their total wage bills than they do in income tax. We have seen a continuous upward trend. Employer contributions have risen from 10 per cent. in 1997 to 12.8 per cent., according to the Government's proposals. Employee contributions have increased from 6.5 per cent. in 1979, under the Conservatives, to 10 per cent. in 1997, and now to 11 per cent. Both the employee and employer contributions represent the highest ever figures in terms of payroll taxes.
	The problem is that the burden falls disproportionately on those on average and lower incomes. There are fewer bands within national insurance contributions because of the upper earnings limit. As we have heard from the hon. Member for Oxford, West and Abingdon (Dr. Harris), unearned income is not taxed in this context. We live in interesting times when we hear the hon. Member for Bolsover (Mr. Skinner) defending the rights of what used to be called the rentier class in days gone by in the Labour movement. I am referring to wealthy people who do not rely on employment for their income.
	There is the rejoinder that those of us who are in favour of fairly taxing unearned income are in favour also of taxing pensioners. It should be remembered that the Labour Government introduced the tax on dividends from occupational pension funds. That has had a considerable impact on the welfare of those who rely on income from such sources.
	If the NIC proposal is not classically redistributive, it certainly will be deflationary in its impact on the economy. We heard about the Beveridge principles from the Chief Secretary. It is true that the Government embraced the idea of shifting the burden of taxation from employment to phenomena that are more negative in terms of social welfare, such as environmental pollution. We saw that with the climate change levy. We now see a shift of the burden back on to employment. We have not had a satisfactory explanation of the rationale that lies behind that.
	It is irrefutable that if non-wage labour costs are increased, ceteris paribus, there will be a negative impact on job creation.

Kevan Jones: The hon. Gentleman has been speaking for 12 minutes, and I am fascinated by his economics lecture. He obviously welcomed the extra investment in the health service, but where would his party get that extra investment, if not from national insurance?

Adam Price: I do not want to detain the House long, but I am happy to send the hon. Gentleman a copy of our alternative Budget, which has not been mentioned so far in our debate, although I am waiting. We favour abolishing the upper limit, introducing a higher tax band to restore a progressive element in the tax system and raising the standard rate. That is probably enough to be getting on with.
	The increase in employers' national insurance contributions will affect business's ability to invest in growth and will delay economic recovery. It will hit labour- intensive businesses disproportionately, particularly small businesses with higher staff-related costs. A major Canadian study estimates that a 1 per cent. increase in payroll costs one year reduces total employment by 0.2 per cent the following year. As a 2 per cent. rise is proposed in the Bill, that analysis suggests a loss of 110,000 jobs in the United Kingdom in the year ending April 2004. Oxford Economic Forecasting has come up with the not dissimilar figure of 110,000 job losses over the next three years.
	If predictions of an economic recovery in manufacturing are true, that recovery remains fragile, which is certainly the case in Wales, Scotland and areas where labour market problems involve not supply side constraints but an effective lack of demand.

Kevan Jones: rose—

Adam Price: I should like to make progress. The hon. Gentleman cannot have it both ways; he cannot accuse me of speaking at length and being generous in giving way.
	There was an opportunity to introduce an element of regional economic policy in the Government's thinking following the pre-Budget report, when we were promised a review of such policy. A number of us in Wales and Scotland have called for a look at regional incentives in economic policy, especially in national insurance contributions. There is an opportunity to target reductions in national insurance on economic black spots where they could have a significant impact. Indeed, the right hon. Member for Birkenhead (Mr. Field) made such a proposal two years ago, when he suggested targeting reductions in employers' national insurance contributions on unemployment black spots. It is therefore a shame that we are still waiting for Government proposals on regional economic policy.
	Previously, we have discussed the impact of employers' contributions, particularly on the public sector, where there are still pent-up demands and wage inflation. Public sector employees, particularly nurses and ancillary staff in the NHS, believe strongly that much of the extra investment going into the public sector should be used to improve their wages and conditions. Logic is on their side; we cannot improve the NHS and other public services without tens of thousands of extra members of staff, as the Government have admitted, who will have to be enticed with higher wages, which involves a significant deadweight cost.
	In that context, the increase in employers' and employees' national insurance contributions will only add to pent-up demands and public sector wage inflation. Scotland and Wales, because of the operation of the Barnett squeeze, will have a lower real-terms increase than that promised across the rest of the UK—6.8 per cent. and 6.5 per cent. respectively—and, in addition, the rise in national insurance contributions will increase public sector wage inflation. The public sector in Wales may therefore be left with a small real-terms increase, which is why Plaid Cymru and the Scottish National party have argued for the public sector to be exempted from the employer contribution. That solution is not perfect—we are not arguing that it is—but at least it would ensure that the NHS receives the full benefit of the promised additional revenue.
	In conclusion, we support Second Reading, because the Bill is the only way to overcome the 20 or 30 years of underinvestment referred to in the Wanless report, including the last five years of wasted opportunity, raised expectations and little delivery. We look forward to continuing the debate not just about the additional investment now going into health, but about other public services facing a similar shortage of funds. We hope that this is a beginning of a new debate with a different emphasis on taxation and public expenditure than has hitherto been the case.

Stephen Ladyman: The debate has been going on for some time. Elements of it were being discussed before the Budget, and discussion has continued at a fierce pace since then. Much of what needs to be said has been said, but that will not stop me saying it again, though perhaps not at the same length as one or two Opposition Members have spoken, as I know that some of my colleagues want to get in. Before my own contribution, I shall comment on some of the remarks from those on the Opposition Benches.
	We have heard much about whether the tax is progressive or regressive, but we cannot look at just one tax. We must consider the whole tax system, which is made up of progressive taxes, regressive taxes and contributory taxes. The entire package must be examined and a judgment made about whether people at particular levels of income are paying the right contribution to society.
	In choosing national insurance contributions to fund the proposed increase in public spending, the Government made some finely balanced judgments. We can argue about whether they have got it right, and Opposition Members can suggest that they have not, but the Opposition cannot attack the increase on the grounds that rich people are not paying enough into the tax system. That is an argument about the whole tax system, which we should have as part of the wider Budget debate, not in the context of a rise that is being levied specifically for the purpose of rebuilding the health service.
	The Liberal Democrats tried to wriggle out of accepting that in their 1997 manifesto, they proposed an increase in national insurance to fund national health service spending. They cannot deny it; the proposal is there in black and white for anybody to see. Admittedly, the amount was piffling. The sum that the Liberal Democrats claimed was necessary to rebuild the NHS in 1997 was just £540 million a year, of which half would go on making prescriptions free. Their total extra spending on NHS investment for a five-year period would have been one fifth of the sum that the present Government put into the NHS.
	The Liberal Democrats cannot claim now to be guardians of investment in the national health service. They were not when they faced the electorate in 1997, and all that they have done since is ramp up their demands every time Labour has put more money into the health service.
	As for the contribution from the Conservative Front-Bench spokesman, the less said, the better. It was a typical performance from the hon. Member for Buckingham (Mr. Bercow)—more entertainment than information. If the national insurance increase that we are debating is so anti-employment, why did the Conservatives leave employers' national insurance at 10 per cent. through 18 years in government? Why, when unemployment was rising from about 750,000 to 4 million, did they never once reduce that national insurance? Why, when manufacturing jobs were disappearing at hundreds of thousands every year, did they never once reduce it? Now they claim that the 1 per cent. increase is anti-jobs.
	When asked how the Conservatives would deal with the health service in the future, the hon. Member for Buckingham said that they had not yet decided. On previous occasions he said that he was not in Parliament for the 18 years of Conservative Government, so he washed his hands of everything that they did in the past. Conservative Front-Bench policy focuses on the present—it will never predict or take responsibility for the past. The Conservatives cannot be allowed to get away with that.
	We should concentrate on four questions: how the national health service should be funded, in general terms; whether it needs more money; if so, whether we will raise that through some form of direct taxation, and whether national insurance is the right form of taxation for that; and how we will make sure that the money is spent wisely. We can discuss the various alternatives for funding the NHS.
	Although they deny it, the thrust of the Conservatives' thinking is clearly towards some sort of private health care system or the increased involvement of the private sector. I say to the Opposition that there are many different business models, but two tend to predominate: high-turnover, low-margin businesses and low-turnover, high-margin businesses. In health care systems such as that of the United States, which is predominantly private, exactly those two business models dominate: the wealthy go into low-turnover, high-margin and high-quality health care systems and the poor go into high-turnover, low-quality and low-margin systems.
	I mentioned in an intervention on the Chief Secretary a recent initiative in Florida, Jeb Bush's state, in which the pharmaceutical industry tried to help the state to reduce its Medicare budget, which was running out of control. The state has to provide such a budget for the health care of poorer people. The industry was asked to help and said that it would try to do so by providing preventive health care and decent primary care systems, on the basis that that might ultimately be the best way of driving down overall costs. For the first time in that state, poor people received preventive health care checks and saw general practitioners who took an interest in their underlying concerns. As we have seen in reports on television and elsewhere, many of those people, a significant number of whom are elderly, could say "This is the first time in my life when I have had a proper conversation and interview about my health needs with a GP."
	That is what happens in an essentially private health care system, which is why we should never take that route. In this country, we have a system that is equitable and provides for people's needs when they arise—and it does so for free. Let me give the House a personal example. My mum has quite severe Parkinson's disease and the health care with which she has been provided is absolutely fantastic. She has never wanted for any medication or for the attention of her GPs. The level of care is such that we as a family could never have dreamt of providing it from our own resources. The health service does not quibble about providing that care. She needs it and gets it in its entirety for free. That is the dream on which our health system was built and we must not give it up easily.
	My next question was whether we needed more money. I can tell the House that we have put substantial extra amounts into the health care system. In east Kent, I have seen the £2 million renovation of accident and emergency facilities and a new ward block in the Queen Elizabeth the Queen Mother hospital in Margate. Three wards around the area have been refurbished and new scanners have been provided, but it is still not enough. The East Kent Community NHS trust is the sixth biggest trust in the country and we have an elderly population of 20 per cent. above average. Despite the extra money, 835 people are still waiting more than 12 months for in-patient surgery and almost 4,000 people are waiting more than 13 weeks for out-patient work. We have done a huge amount, but we still need to do more. The total increase in spending between 1996–97 and 2002–03 has been almost 50 per cent. The level has gone from £262 million in east Kent to £521 million, so nobody can argue that we have not pumped extra money into the health service in east Kent or that we have not made real gains—but the gains have not gone far enough.
	Finally, I asked whether national insurance was the right way of raising the extra money that we need. Opposition Members would do well to read the Bill; I fear that many of them have not done so. They would see provisions that I would have thought they would welcome. One of them asked whether the changes that are being made were the thin end of the wedge. The Bill is necessary because many of the changes that are being made require primary legislation. If we were further to increase the contribution that national insurance makes to the health service, that would require further primary legislation. I should have thought that Opposition Members would say that it is a good thing for taxes to be raised in a way that requires primary legislation. I should also have expected them to welcome the fact that clause 4 gets closer than the Chancellor has ever got to hypothecation by making it clear that the extra money has to be spent on the health service.
	As we have heard, pensioners will not have to pay because they do not pay national insurance. That also applies to people saving for their retirement. That may give rise to anomalies. Baroness Thatcher and people of similar wealth will not pay any extra towards the health service, but that is a small price to pay for raising the money that the health service needs and delivering it to where it has to go.
	There are already 31,000 extra nurses, 9,000 more doctors and 12 new hospitals as a result of the work that the Government have done. In a thoughtful contribution, the hon. Member for Stratford-on-Avon (Mr. Maples) went a long way towards saying that the money would have a real impact, with the proviso that the jury was still out on whether it would have the impact that Labour Members hope. He is right, and I accept his challenge. In four years' time, if the extra money that we are putting in has not reformed health care and our NHS modernisation programme has not turned things around, the onus will be on Labour Members to admit that we were wrong and to be prepared to consider alternatives. However, as the money that we have already put into the health service has led to demonstrable and good progress, there is no reason not to believe that the additional funding—which I hope that the House will take the first step towards approving tonight—will be the next step towards proving that the national health service can deliver the dream of its creators.

Bill Rammell: I am pleased to make a contribution to this debate on one of the most significant pieces of legislation that the Government will pass in all their years in office. I genuinely mean that. Just as the Tory privatisation programme in the 1980s was emblematic of what the Tories in government were about, and fundamentally changed our society, the Bill and the budgetary changes associated with it define more clearly than anything what the Labour party and the Labour Government are about, and will change this country for the better.
	The Bill is the culmination of a careful, deliberate and gradualist strategy to rehabilitate the concept that direct, progressive taxation can be used as a tool to achieve a social good. Our arguments make that clear, and they have resonance with people. We are telling them that society does not get something for nothing and that if we want a world-class health service, we will have to pay a little more through extra direct taxes.
	There is public support for that view, and I am confident that we are also beginning to win the debate in the House of Commons. Nothing gives me more confidence in saying that than the fact that, although this is one of the most significant pieces of legislation that the Government will introduce, for most of the debate no Tory Back-Bench Members have been present—currently, there is one. That shows that they do not have the stomach for debating this issue. They know the direction in which the public debate is going and how the public mood is moving.

Bill Wiggin: On a point of order, Mr. Deputy Speaker. I have been here for virtually the whole evening. I popped out to see a constituent, having made you aware that I was doing so. The hon. Gentleman is, perhaps inadvertently, attempting to mislead the House.

Mr. Deputy Speaker: That is not a point of order for the Chair.

Bill Rammell: The hon. Member for Leominster (Mr. Wiggin) is the exception who proves the rule. If Conservative Members believed that they were in tune with the public mood and that they could win the argument, they would fill the Opposition Benches and try to make their case. Their absence speaks volumes.
	Let us consider the substance of the Bill. I warmly welcome the measure because it firmly establishes the principle that taxation, and sometimes increases in direct taxation, is necessary in a civilised society. The Government are building on the developing consensus by introducing the measure.
	In the 1980s, the public mood, to which the Conservative Government responded and which they also led, was tax cuts at almost any price. After more than 18 years, people have realised that such a strategy entails enormous cost in damage to schools, hospitals and public services generally. In 2002, there is greater public recognition that we do not get something for nothing. People look increasingly to Europe and countries such as France and Germany where waiting lists do not exist. People logically conclude that that is not unconnected to the substantially greater sums of public money that are spent on their health care systems. According to figures from the Library, of the 15 European Union countries, Britain has historically spent the second lowest percentage of GDP on health.
	I increasingly believe that people are ready to endorse a preference for progressive taxation to fund the improvements that we need in the NHS rather than social insurance, private medical insurance or direct charges. I was interested to listen to the shadow Chief Secretary, who denied that the shadow Secretary of State of Health had advocated direct charges in the NHS. He may not have realised that his comments were recorded, but he went out of his way to advocate what he termed "self-pay". Self-pay or direct charges take no account of ability to pay and are far more regressive than direct taxation to pay for public expenditure. To appreciate how disastrous such a system can be, we should consider the United States, where 40 million out of 200 million people simply do not have access to decent health care. That is genuinely worrying.
	We are moving in the right direction, but the key question is whether we can convince the public that direct tax changes through increases in national insurance constitute the right way forward. Initial opinion polling evidence gives ground for optimism. The Daily Telegraph poll shows that 77 per cent. of people support the increased expenditure for the health service and 63 per cent. believe that we were justified in raising national insurance.
	I urge some caution. People have not yet started paying the taxes and we should never underestimate the capacity of people to support tax rises in principle but, when the crunch comes, to find all sorts of reasons against them. If we are to win the debate fundamentally and in the long term, we need to take some action. First, we must provide the extra doctors, nurses and beds to increase NHS capacity.
	Secondly, we must be careful about the way in which the additional money is spent. I speak as a Member of Parliament for a south-east constituency, and I am conscious of the need to increase health professionals' pay, especially to meet additional housing costs. I give a word of warning. If the bulk of the unprecedented, substantial increase in public expenditure is spent simply on additional pay, and the public do not perceive sufficient improvements in the services that they receive, they will not thank us in the long run. I therefore welcome the fact that the Secretary of State for Health went out of his way to say that higher salaries must be accompanied by higher productivity and increased responsibility.
	We must also make it clear, in terms of winning this debate, that this is long-term investment for long-term change. We have underfunded the national health service for more than a generation, and this is not going to be a quick fix; it is going to take time to build up the capacity. We need to say that because, otherwise, when the taxes start to bite in a year's time, the Conservatives will say to us, "People are paying the extra taxes. Where are the improvements?" There will be improvements—there are already improvements—but this is a long-term strategy. We need to make the point very clearly that we cannot underfund the national health service for 18 years and expect everything to be put right in just a short period of time.
	I shall deal with some of the criticisms that have been put forward today by the Conservatives. First, they said that we had broken our election promises, but I certainly remember the Chancellor and the Prime Minister repeatedly refusing to rule out rises in national insurance contributions during the general election. Secondly, I simply will not take lessons from the Conservatives about keeping our promises on tax during a general election campaign. We all remember the 1979 campaign, in which they said that they would not put up VAT; they doubled it immediately after the general election. Similarly, in 1992, they said that they had no plans to raise the rate or change the scope of VAT. What did they do straight after the general election? They increased it by 2.5 per cent.
	I question the integrity of the Conservatives position when they say that they are committed to extra spending on the national health service. I have been staggered in recent weeks to read some of their statements, particularly when the shadow Health Secretary said:
	"we agree on the need to spend more on health care in the United Kingdom".—[Official Report, 23 April 2002; Vol. 384, c. 162.]
	Forgive me, but I simply do not believe that statement. The Conservatives were in power for 18 years—the longest period of one-party rule in this country since the second world war—but never did we see the increased investment levels that this Government are now introducing.
	This is a debate about extra resources, and about the need for those resources. It is also about the fundamental choice that we face: do we want a socialised system of health care that is free at the point of use, or do we go down the road to private medical insurance and charging? The most revealing moment in this debate was when the shadow Chief Secretary was invited three times to say that he supported a national health service that was free at the point of use. Three times he ducked the opportunity to confirm that; he simply said that he was in favour of a better national health service. Put alongside what the shadow Health Secretary has said about wanting self-pay and private medical insurance, that makes it very clear that the fundamental choice is between rebuilding the national health service—free at the point of use—under this Government or being forced to pay for it, in a way that takes no account of the ability to pay, by the Conservative party. I am absolutely confident which way people will go.

Bill Wiggin: I can see that other hon. Members wish to speak, so I shall take no interventions and try to keep my speech as short as possible. I should like to begin by heaping praise on the hon. Member for South Thanet (Dr. Ladyman) for having actually read the Bill. Labour Members who refer to "ordinary people" should show those people the Bill and see whether they can make head or tail of it. The implementation of the Bill will raise about an extra £10 billion a year, and the Government have earmarked those funds to part-fund a 43 per cent. increase in national health service spending over the next five years. They are demanding yet more of the taxpayer's hard-earned money, but have so far failed to propose any policy for spending the extra cash that even hints at being effective.
	My constituents are paying £1,600 a year more in tax than they were in 1997, yet waiting lists are rising again and the chances of surviving cancer in Britain are among the worst in Europe. The Chancellor's increase in employers' national insurance contributions will hit the public services hard. The Government have admitted that their changes to national insurance will cost the public sector £1.2 billion, of which £200 million represents the increase in the total salary bill for employing 1 million national health service workers in England. So, although the Budget has been heralded by the Government as the saviour of the NHS, it will actually start off by costing the health service money.
	It is not just the Conservative party that has labelled the Budget as more tax and more talk, but making no difference. The message from the public is clear, too: it is not good enough. The British public lost faith in the Government several broken promises ago, so no wonder the Chancellor's latest money-grabbing initiative has not been as well received as they hoped.
	Employees and employers are rightly unwilling to pay more of their hard-earned income in national insurance contributions, because of the Government's track record of failing to deliver. In Herefordshire, last-minute cancellations of operations for non-critical reasons have risen by 121 per cent. in the past year. That group, as a percentage of elective admissions, has doubled in size over the last year—and the number of those unfortunate patients not to be admitted within a month of the cancellation is up by 260 per cent. The number of patients in my constituency who are not admitted within a month in the first instance rose by 58 per cent.
	In conjunction with the hon. Member for Hereford (Mr. Keetch)—sadly, he is not in his place now—I have recently been involved with a petition that received more than 26,000 signatures from people in Herefordshire. The "Give us the beds we need" petition was part of my campaign for much needed funds to provide the new hospital at Hereford with the additional 120 beds that it needs to operate efficiently. It also needs those 120 beds to make it the same size as the hospital that it is replacing.
	A large group of doctors, nurses and hospital workers from Hereford hospital made the 150-mile journey to London last month to present the petition to Downing street and to demonstrate their dissatisfaction with the Government. The message from my constituents is loud and clear: the situation is unacceptable. I am sure that the good people of Herefordshire are not the only ones in the country who have had enough of broken promises, increased taxes and decrepit public services.
	The situation in the NHS is that waiting lists are rising again, hospital beds are blocked—mainly because care home beds have been closed—and the odds of surviving cancer in Britain are among the worst in Europe. Last year 250,000 people without insurance paid for their own operations—more than ever before. More talk and more tax will not give people the standard of health care that they deserve. Scotland spends as much as Australia and Holland on health, and Wales and Northern Ireland spend as much as France, yet patients are receiving inferior treatment.
	The Budget is a missed opportunity, and the Treasury has a closed mind on health care. It says that we have nothing to learn from other countries, despite the fact that Germany has no national waiting lists, and Danish patients have a legal right to treatment within four weeks of seeing a GP. We have an open mind. We have visited other countries that deliver better health care, simply to see what we can learn from them. Yes, Britain needs to spend more on the health service, but spending it on how the NHS is run today, and raising higher and higher taxes, will not give this country the health care standards that it has a right to expect.
	Patients are paying to be treated outside the NHS. When the Independent Healthcare Association says that more than 250,000 people are having to self-fund their operations in the private sector this year, we know that things are not right. An article on BBC Online has revealed that hundreds of British patients are flying to South Africa for treatment to avoid NHS waiting lists in the UK. Over the last six months, the number of Britons travelling to South Africa to take advantage of cheaper and quicker hospital treatment has risen dramatically.
	The west midlands area health authorities, which cover my constituency, last year reported more than 1,000 delayed discharges from hospitals due to the shortage of care homes. The same was true the year before. To make matters worse, research has shown that over one third of those discharges are delayed by more than a month.
	The NHS is in turmoil—we all know that—but the delayed hospital discharge problem could be eased greatly if the Government addressed the shortage of care home beds and the lack of funding for existing homes. Instead, their proposed national insurance contributions tax will have a dramatic effect on the operating margins of those homes—to their detriment, sadly.
	Many small care homes in England are running at a 5 per cent. margin, but for an average care home, wages are 80 per cent. of costs. Therefore, the national insurance increase will reduce margins by 20 per cent. That increase may impose costs that are too onerous for many smaller care homes to cope with. Frank Ursell, the chief executive officer of the Registered Nursing Homes Association, said:
	"For those care home owners who are already teetering on the brink, this tax increase on wages could be the final straw. Many care home owners could say 'I've had enough'".
	In the current year, total NHS spending in the UK is expected to be about £68 billion. The Wanless review estimates that there will need to be a rise of between £154 billion and £184 billion by 2022–23 in order to deliver the high quality service envisaged. That implies total NHS spending increases at an average rate of between 4.2 and 5.1 per cent. a year in real terms over that 20-year period.
	The increased activity implied by the projections in the report would result in a substantial increase in demand for health care workers. Derek Wanless estimates that at least two thirds more doctors and a third more nurses will be required over the next 20 years. Under the existing plans, which Wanless describes as "ambitious", the report estimates a small shortage of nurses by 2020, and a shortfall of 25,000 doctors, especially GPs.
	That caused the British Medical Association much concern. In a statement to the House, the Secretary of State for Health pledged that the Government's plans for health reform would deliver 15,000 more doctors. I am left wondering where the other 10,000 will come from. It is time that the Government ceased promising everything and actually delivered. I accept that there are no quick fixes, and everyone realises that the situation is difficult and problematic, but the sensible route is not one of unattainable objectives. The Government would do well to forgo their announcements of miracles, because the public are no longer fooled. Only real results and real policies will do for the NHS and for the people of Britain.
	Sadly, it is typical of the Government that the Wanless report was released on Budget day, when media attention was focused elsewhere. Perhaps the disparity between the number of doctors needed and the number pledged by the Government led to that attempt to bury the report.
	The best insurance policy in the world is one that people can claim on and which delivers without delay. I do not believe that the Bill can do either. 9.17 pm

Chris Mole: The debate on national insurance contributions is important, because we must find the right way to raise funds fairly and efficiently for the NHS. It is clear that we should use national insurance, not income tax. The Budget package seeks to take progressive and significant steps on behalf of pensioners, and this is one way in which we can provide resources without calling on pensioners.
	Investment clearly works—we have only to look at the cash for change funds that the Government made available from late 2001. In my constituency, that scheme is already delivering reductions in the number of acute hospital beds blocked by delayed transfer of care. The Ipswich hospital in Heath road has seen a reduction from 64 last November to 24 in March.
	I would also like to draw attention to the investment of £1.9 million in intermediate care at the Ravenswood development in my constituency, which will help to meet the need of the elderly for the mixture of social and health care that increased resources can deliver.
	The Opposition should lay out their proposals for a costed practical alternative. They need to explain to people what their proposals would mean and what they would cost. They must say whether, under their proposals, the health service would be free at the point of usage.
	As we have heard, there are many reasons why there is increasing demand for additional health care expenditure. Demographic changes, new technology and rising expectations of the health care system demand that we take a close look at its financial needs. Many illnesses and injuries are now survivable that perhaps 50 years ago, at the inception of the NHS, were not. They can now be treated with some confidence. We are in the middle of a pharmaceutical and biological revolution, with new procedures and new practices. There are new technologies such as minimally invasive surgical procedures, and new drugs with greater efficacy and acceptability. My local primary care trust has confirmed evidence gathered nationally that the amount of medicines, dressings and appliances dispensed in the community has been rising by about 10 per cent. a year over recent years.
	To return to the point about demography, the number of people over 65 is expected to increase by nearly one third over the next 20 years. That is why I welcome the element of the Budget that will raise real-terms spending on social care by some 6 per cent. per annum. Much ill health is age related, and that additional social care investment will be important if we want to deliver on the expectations of our health service, which I believe we all do.
	If we compare our performance with that of many of our European competitors in areas such as life expectancy, infant mortality, premature mortality and survival rates for cancer and heart disease, we know that we can and must do better. People want us to deliver on improved use of new technology, shorter waiting times and enabling them to spend more time with their GP.
	When we look at the Bill, we have to question what the alternatives might be. Clearly, there are alternatives such as charging, private insurance and social insurance. Most countries rely on a mixture of those. The trouble with charging is that, unlike a regular trip to the shops, our individual demands on health care are not predictable. In many instances, consumers of health care will have much less information and less expert knowledge than they would have when purchasing other goods and services. There is a risk of professionals setting the price for their service.
	Eighty per cent. of patients in France take out supplementary insurance to pay for charges. If that is what the Conservative Opposition are proposing, that really is a stealth tax by any other name. It is important to us all that we do not go down that route, because if people are put off seeing the doctor, they are likely to end up back in the health care system with more severe health problems. Charging makes the sick pay for their sickness, so it is not a good idea.
	Private insurance is not an efficient system. Administrative costs are higher. In the United States, administrative costs are about double those in Canada, which has a more general tax-funded system. In those countries, the people who need health care most are the least likely to be able to afford it. The evidence is that the sickest 10 per cent. of the American population spend six to seven times what the average American citizen does on health care. Someone with a private insurance policy that may cover only 80 per cent. of their charges can be faced with additional costs of, for example, $2,000 for hospitalisation during child birth. Many insurance policies exclude primary care and emergency care. I do not think that that sort of approach would drive consumers to change their pattern of consumption, because most of the costs of health care are initiated by the doctors, not the patients.
	Let us have a brief look at social insurance, Compulsory contributions paid into and managed by independent, not-for-profit sickness funds are also a stealth tax by any other name. Is that what the Opposition are recommending? Employers end up footing much of the bill, paying on average £60 per week per employee, compared with the £5 or so that employers pay in this country through national insurance, or perhaps a total bill of £10, if we include the company's contribution through general taxation. It is also a system in which costs can fall on companies whose employees are sick. In our system, there is a significant sharing of risk among employers, which helps many small and medium-sized businesses.
	We should now look at the national insurance system that the Bill is asking us to put our faith in. It offers a good deal over the lifetime of the individual, allowing us to have a health service more comprehensive than those funded by other systems. It gives us the general practice system, community nurses and other facets of our health service. It covers all of the people all of the time. Some 80 per cent. of the NHS is now funded from general taxation, and funding and costs do not fall on one group only.
	We should affirm our support for a system that does not impose higher costs on those predisposed to illness and does not demand that employers bear the main burden of health costs. It is a modern and rational choice, and it is the best insurance policy in the world.

Parmjit Dhanda: Before considering the Government's proposals on funding the NHS through national insurance contributions, I thought that it might not be a bad idea to have a look at some of the alternatives. Last Wednesday, the hon. Member for Aylesbury (Mr. Lidington) said that the nation could expect his party to examine the experience of other countries and to offer clear and costed proposals when they have completed that period of analysis.
	The hon. Gentleman does his own colleagues something of a disservice. I would like to take this opportunity to sketch some of the ideas that his colleagues already have, and about which they have, to some extent, thought long and hard. They are well documented, if one digs a little.
	The hon. Gentleman said that it would be necessary to examine the experience of other countries, and that is all well and good. Let us take a slightly closer look at the American model. I understand that the hon. Member for Christchurch (Mr. Chope), on hearing that 14 million Americans are not covered by any health insurance at all, has ditched his American model, and quite rightly so. He ditched the American model in favour of a Swedish one. He said that in 1999, St. George's hospital in Stockholm was sold to the private sector, producing a reduction in costs of between 10 and 15 per cent. He said:
	"If health care can be improved in Sweden without taxing spending and wasting, we can do it in this country as well, given the will."
	I was somewhat surprised to hear a member of the shadow Cabinet expressing admiration for the public service policy of the one country in the world that is renowned for heavy taxation, but I am pleased that he has such an open mind. However, I do not think that the hon. Gentleman's Swedish model could be employed in this country, for the simple reason that while Sweden has, for the last 30 years, had one of the highest tax and spend policies to provide for its health service, the NHS in the United Kingdom has been chronically underfunded by the Conservative party.
	I fear that the shadow Cabinet will have to ditch both their American and Swedish models. But it is quite astonishing how far they are prepared to go find a suitable model for the NHS. Let us turn to Canada, and to the example of the provincial Government of Saskatchewan. Between 1987 and 1989, the current shadow Home Secretary—a former Treasury spokesperson for the Conservative party—worked as an assistant director for N. M. Rothschild and Sons and advised the provincial Government there on a series of privatisation programmes. Most of us are aware of the hon. Gentleman's ideas about the public services, but before we consider the Saskatchewan model, I want to remind the House of some of his constructive contributions to the debate on funding public services in years gone by.
	In 1987, in an article entitled "The privatization of education", the hon. Gentleman said:
	"You can privatize just about anything."
	In 1988, he wrote a thesis entitled—I am not making this up—"Privatising the World". In 1996, he described the privatisation of nuclear power stations as
	"intrinsically an entirely bankable proposition."
	He probably thinks, therefore, that his party could indeed consider privatising as many of the public services as it can get away with, including the national health service.
	The Saskatchewan Government listened to advice from the person who is now the shadow Home Secretary about various privatisation programmes. He was obviously very good at his job. His company was reportedly paid $30,000 a month for his services—very good work, for those who can get it. In his view, the Saskatchewan Government had not done a particularly good job of privatising the dental service, but his advice to them was heavily criticised in the state legislative assembly.
	The Saskatchewan Hansard of 23 March 1989—I can provide a copy—says of the shadow Home Secretary that he
	"will tell them that—and has told them, I understand—that the way they went about privatizing the dental plan was one of the worst examples that he has ever seen. He says: you don't do it that way. You got to be smoother. You got to con the people more. You got to work slower. Privatize some other things first and then work your way to health once you soften people up."
	I doubt whether the shadow Home Secretary is very popular in Saskatchewan province. Given the verdict of the Saskatchewan Government, it may be best for the shadow Cabinet to ditch this model, along with the American and Swedish ones—unless they really do want to con the people, privatise some things first and work their way slowly towards health, once they have softened people up.
	The shadow Cabinet need to clarify their policies on national insurance contributions and the funding of the national health service, and I am pleased to say that they need look no further than the House of Commons Library. In 1993, the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), now the Leader of Her Majesty's Opposition, co-authored a pamphlet entitled "Who Benefits?" Four of the five Conservative Members of Parliament who wrote it are now shadow Ministers.
	On page 19, under the heading "Privatising Insurance", the pamphlet states:
	"The private sector should be encouraged to take on the role of providing the kind of insurance for which National Insurance Contributions must currently be paid."
	It proposes giving rebates to those who can afford to pay for their own health insurance, and to those who can afford to insure themselves privately against unemployment, invalidity and even pregnancy. In return, a Conservative Government as envisaged by the Leader of the Opposition could scale down the national health service massively, because it would be a service only for the poor, the unemployed, the disabled, the elderly and the particularly needy—those who could not pay the premiums in a private health insurance scheme.
	The proposals would make healthy and very wealthy people better off, and leave the rest of the country dependent on an underfunded two-tier NHS. However, the pamphlet also suggests that that state of affairs would be only a temporary solution. The Leader of the Opposition had longer term ideas, which the pamphlet puts succinctly:
	"Ultimately, the state may provide no insurance of its own."
	That is what the right hon. Gentleman put his name to, and I hope that it is helpful to the shadow Cabinet as they try to clarify their position on NI contributions and the NHS.
	By contrast, the Government have laid their policy out clearly. The Bill says that they seek to make provision for
	"increasing national insurance contributions and for applying the increases towards the cost of the national health service."
	The Bill will do exactly what it says on the tin. The Government will raise NI contributions by 1 per cent. and increase UK health spending to £65.4 billion this year and to £105.6 billion by 2007–08. For the extra penny in the pound paid in NI contributions, my constituents can expect their local health authority to receive more than £430 million in the coming year, which is £206 million more than it received in the last year of the last Conservative Government, so I welcome the Bill. Its aims and means are clear, and it will guarantee an NHS that is free to all at the point of use.

John Mann: We have heard lots of bluster and a smattering of supposition from hon. Members on the usually empty Opposition Benches, but that is not surprising because they are in a quandary. Last week, I challenged the hon. Member for Aylesbury (Mr. Lidington) to ask his voters, through his website, what they thought of the NIC increases. Unfortunately, he does not appear to have done so. Let me help him out. Last Thursday, I visited Bassetlaw hospital with the Under-Secretary of State for Health, my hon. Friend the Member for Salford (Ms Blears). The hospital presented 60 staff, from consultants to cleaners, and not one of them had any opposition to paying more NICs for the NHS. My hon. Friend also asked every patient whom we saw at random in the hospital what they thought of the NHS. Every single one was positively in favour of the NHS and what the Government are doing.
	I have asked several times what model is preferred. I was told repeatedly, and Hansard will show, that the American model has been discounted, which can leave only the west European high taxation model. My hon. Friend the Member for Gloucester (Mr. Dhanda) mentioned Sweden and Canada, but my example is Germany. The German model is a pluralist, corporatist and regional model. Many of the hospitals are funded by organisations. For example, the trade unions run their own hospitals through the Workers' Welfare Agency—the Arbeiterwohlfahrt—as do the Lutheran church and the Roman Catholic Caritas agency.
	If the Opposition have discounted the American model and the British model, do they prefer the German model? If so, which trade union will they invite to run the hospitals? Will they be honest and tell people that is what will happen? In fact, in the German model, health care funding is overseen at the regional level by the trade unions and the employers. One similarity between Germany and the US is collective bargaining. Some 99 per cent. of large employers in the US which run an insurance scheme have collective bargaining. The Teamsters in Ohio have five separate schemes that they attempt to negotiate with their members' employers. That is why the employer cost is higher. The employer cost in Germany is also higher, thanks to the system built up since the war and first created by Bismark. The trade unions are a full part of that system. Social insurance costs employers in Germany three times more than employers in the UK, and it costs employers in France six times more.
	I am not sure what Baroness Thatcher would make of the Conservatives' move towards the social partnership model, but if they discount the model of the NHS and the model of privatisation in the US with its collective bargaining, that leaves only the high-tax Swedish model or the decentralised German model. It is make-your- mind-up time. Perhaps the Conservatives' spokesman will tell us when he winds up which one they are plumping for.

Christopher Chope: Three things have been established during the debate: first, the Government have broken their promises; secondly, there will be damaging tax rises for employees, the self-employed and employers; and thirdly, there is no evidence that concrete improvements will flow as a result of the additional expenditure—any more than there was on any previous occasion.
	The Government are always talking about extra concrete improvements as the return for extra concrete investment. On 24 June 1999, the then Chief Secretary to the Treasury—the present Secretary of State for Health—stated:
	"We have fulfilled our commitment to publish Public Service Agreements covering all the public services. They set out the concrete improvements to be delivered in return for the extra investment we are making."—[Official Report, 24 June 1999; Vol. 333, c. 458W.]
	Those concrete improvements have not been delivered, yet the Government are talking about massive extra investment with no guarantee that we shall get the reforms.
	Let me dwell on those broken promises—a serious issue. During the—

Phil Hope: The hon. Gentleman is running down the NHS.

Christopher Chope: That is exactly what the hon. Gentleman and his party did while we were in government—they ran down the NHS and tried to undermine confidence in it.
	During the last general election campaign, the Chancellor of the Exchequer was repeatedly questioned as to whether Labour intended to raise the national insurance ceiling. His spin doctors briefed journalists in a dishonest way. On the BBC 6 o'clock news bulletin on 22 May 2001, Mark Mardell said:
	"Those close to Gordon Brown say it's completely wrong to interpret this reluctance as meaning there is a plan to put up national insurance. They say that's not his intention."
	At that time, no one was much closer to the Chancellor of the Exchequer than the Chief Secretary. Earlier in the debate, the hon. Member for Oxford, West and Abingdon (Dr. Harris) challenged the Chief Secretary to deny that he knew a year ago that national insurance would have to be raised.

Andrew Smith: I had no such knowledge.

Christopher Chope: It is a pity that the right hon. Gentleman did not say that earlier. I am glad we have pressed him into saying it now. Perhaps it shows that he is not as close to the Chancellor as he thought.

Evan Harris: Does the hon. Gentleman find it surprising that the Treasury No. 2 could not foresee such a huge increase in taxation and NHS spending six months or a year before it happened? One would have thought that the Treasury team would be capable of predicting that.

Christopher Chope: I agree with the hon. Gentleman; many people would think that surprising, but our experience teaches us otherwise.
	We shall continue repeating the comments of the Secretary of State for Trade and Industry on the "Powerhouse" programme on 29 May 2001. She said:
	"We've got no plans at all to raise that ceiling on National Insurance contributions."
	This is the fourth debate on the national insurance changes since the Budget, but the Government have still not apologised for having blatantly misled the electorate on the issue.
	Let me conclude my account of the broken promises by referring to the Prime Minister's words in Mr. Desmond's Daily Express. The right hon. Gentleman said that the Government had not "the slightest intention" of hammering people on £30,000 and £35,000 and the higher income brackets. Of course, if we consider the Prime Minister's words carefully, we realise that when he said that they had not slightest intention, that left the way open for them to have the greatest intention. That is an example of the way the Government use words to deceive the electorate. It is no surprise that the leading article in The Economist, referred to by my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley), attacked the brazen claim that the Government had not broken any promises in the Budget.
	A more important consideration for some people is whether extra employers' national insurance contributions will damage industry. On 6 October 1999, the Government's response to the Select Committee on Trade and Industry stated:
	"The climate change levy and the associated reduction in employers' National Insurance contributions represents a shift in the burden of taxation from 'goods', such as labour, to 'bads', such as environmental pollution. The reduction in National Insurance contributions will reduce the cost of labour and thereby encourage employment opportunities throughout the economy."
	That is what the Government were saying in 1999. By the Government's logic, therefore, the Bill will add to the cost of labour and discourage employment opportunities throughout the economy. That is endorsed by businesses large and small.
	Mr. Anthony Goldstone, who was quoted selectively by the Chief Secretary in his opening remarks, said at the British Chambers of Commerce conference:
	"There is no point simply pouring our money into a bottomless pit."
	That will have severe implications for the public sector as well. It is interesting that the Treasury is going back on what Lord McIntosh of Haringey said in another place:
	"the cost . . . to public sector employers is estimated to be around £1.2 billion in 2003–04."
	He also said that
	"the cost to the National Health Service is £300 million, not the £200 million to which the noble Baroness, Lady Noakes, referred."—[Official Report, House of Lords, 24 April 2002; Vol. 634, c. 244-45.]
	Those figures now seem to be disputed by the Government's spokesmen, but that was what was said immediately after the Budget.
	Are these national insurance increases necessary? The hon. Member for Strathkelvin and Bearsden (Mr. Lyons) said that they were particularly fair because they were going to the NHS. He and his constituents are the victims of a massive confidence trick. If one looks at the Red Book and the Budget in detail, one sees that they add £4 billion to departmental expenditure limits for next year, £2.4 billion of which has been immediately allocated to United Kingdom health spending and £0.4 billion to personal social services. That adds up to £2.8 billion extra next year for the health service. The additional national insurance contributions, however, will yield £7.9 billion, and freezing income tax, personal allowances and national insurance thresholds will yield a further £700 million, which is again justified on the basis that it is needed for the NHS. Last week, in winding up the debate on North sea taxation, the Economic Secretary justified the £450 million taxation increase on North sea producers on the basis that it would be
	"revenue that will help put the NHS back on a sustainable long-term financial footing".—[Official Report, 9 May 2002; Vol. 385, c. 359.]
	If we add that yield of £450 million to the total, we are talking about tax increases of £9 billion next year, only £2.8 billion of which is necessary for the national health service.
	This is a massive confidence trick. Like a child who says, "I'd like some more pocket money to spend on books, Daddy", and then spends it on sweets, the Government are saying to the taxpayers of this country, "Please pay up because we're going to spend it all on the NHS", whereas they are going to spend a heck of a lot on dealing with the waste already incurred in other Departments.
	We have debated whether we will be able to achieve proper improvements in the NHS as a result of this expenditure. Nobody was able to show any evidence of improvements in the NHS as a result of increasing expenditure from 6.7 to 7.7 per cent. of GDP. Nobody was able to answer the question: why are a record 250,000 people paying for their own treatment? In many respects, performance is deteriorating. That is confirmed by the King's Fund five-year health check. Under the NHS plan, there were targets for July 2000 that no one should wait more than six months for in-patient treatment. By December last year, 277,500 people were waiting, which was more than in March 2001. Similarly, in July 2000, the NHS plan set a target for attainment by March 2002. No one was to wait more than 26 weeks for an out-patient appointment, but we now know that, by December 2001, the figure was 84,300 and higher than it had been in March 2001. That shows that performance is moving away from the targets that have been set and that bad performance is continuing with impunity, as far as the Government are concerned.
	People have spoken in the debate of what things were like under the Conservatives. At least under the Conservatives, 89 per cent. of accident and emergency patients were admitted within four hours. By 2000, the figure had dropped to 76 per cent. So the proportion of accident and emergency patients not admitted within four hours has more than doubled under this Government. In 1996, 73 out of every 100 patients were seen by a doctor within one hour. In 2000, only 53.5 patients in 100 were seen by a doctor within an hour. Again, that is a manifest deterioration in the quality of service. The Audit Commission has said that there appears to be no link between work load and the speed of treatment.
	Since 1996, there has been a drop of 49,700 in the number of places for long-stay residential care for the elderly and the disabled, and a host of care homes have closed as a result. In 1997, 50,505 operations were cancelled but, in 2001, 77,818 operations were cancelled. In 1996, there were 30,000 fewer administrators than now, but there were 13,000 more beds. Is it surprising that an increasing number of people say, "Bring back the Conservatives"? We know how to administer the health service.
	My hon. Friends the hon. Members for Stratford-on-Avon (Mr. Maples) and for Leominster (Mr. Wiggin) drew attention to what has been happening in Scotland. Of course, as people know, expenditure on health in Scotland is extremely high compared with in England. In 1999, NHS spending per head in England was £740; in Wales, it was £822; and, in Scotland, it was £904.
	Before Labour Members troop into the Lobby to support the Government, they should be reminded of an interesting article that appeared in Public Finance on 29 March this year. It said that
	"under devolution, so much cash is being thrown at NHS Scotland that health spending is projected to reach 8.1 per cent. of the nation's national income by the end of next year. This won't just be above the European average—it will be higher than in any other country in Europe.
	Yet, for all this, the Scottish NHS is being denounced as a disaster by its patients. Waiting lists refuse to die down, the national health record is atrocious and, worst of all, the public is furious. Scotland is living Tony Blair's future, and it demonstrably does not work . . . The Scottish NHS has the cash that Blair covets so badly—and has nothing to show for it . . . If Blair's logic is correct, the Scots should be a pretty healthy bunch—and far happier with the NHS than the patients of the cash-strapped English system. But there is the rub.
	The Scots have the worst health record in the UK. The death rates, also measured by National Statistics, show Scotland doing worse than any other part of the UK in everything from cancer to suicide rates. For every 100,000 people, 58 Scots die of bronchitis (49 for England) and 228 from coronary heart disease (205 for England) . . . A government survey of NHS patients, taken in Scotland last year, shows that 25 of every 100 patients were so dissatisfied that they considered making a formal complaint. This was true for only ten of every 100 patients of the lower-budget, longer-waiting list English NHS."
	That is what is happening in Scotland, and that is what will happen in England if we have more expenditure without reforms.
	The Government have been presiding over an NHS that is riddled with fraud and waste—[Hon. Members: "Oh!"] We want a better system. Labour Members seem surprised. The amount of fraud was revealed by a senior civil servant, Stuart Emslie, who estimates that of the £54 billion annual budget of the health service in England, between £7 billion and £10 billion has been lost through waste and fraud.
	The Labour party is not interested as long as it can carry on taxing. That is the difference between Labour and the Conservatives. We believe in getting value for taxpayers' money, and that is why we will oppose the Bill until we see reforms.

Dawn Primarolo: If the hon. Member for Christchurch (Mr. Chope) is in favour of the national health service, everyone listening to this evening's debate will understand why the national health service is not safe in Tory hands: he made not one positive statement about the national health service.
	Many hon. Members on both sides of the House have contributed to the debate. Essentially, they broke into two camps: those who agree that the national health service needs more money and investment, although they may disagree on how the money is raised, and those represented by most of the Conservative speakers, who prefer to state why the national health service should not receive any more funding and why they believe it should be privatised and broken up. The notable exception was the hon. Member for Stratford-on-Avon (Mr. Maples), who made a thoughtful speech. I intend to return to some of the points he made.
	My hon. Friend the Member for Gedling (Vernon Coaker) started the Back-Bench speeches. He pointed out that the Chancellor's Budget set out plans for an unprecedented increase in spending in the NHS, and proposals for financing that increase in spending in public services which ensure that the investment achieves results. The Bill will deliver the funding for a sustained improvement in the NHS—unlike the alternatives of private insurance or employer-based social insurance policies.
	Our proposals mean that the NHS will continue to be available to all, without restriction, not based on ability to pay, and funded through general taxation. Despite repeated requests and challenges to commit themselves to a national health service comprehensively available and free at the point of need, Conservative Members continued to decline to do so.
	Using the national insurance contribution means that the money is raised as fairly as possible. Employees and the self-employed will pay an extra 1 per cent. of all of their earnings above £89 a week, and employers will make the same contribution, acknowledging the fact that an efficient health service is also in their interests. After the changes to national insurance, British companies will still pay less towards the cost of their employees' health than many other countries, particularly European countries.
	The hon. Member for East Carmarthen and Dinefwr (Adam Price) referred to the OECD study of the rising imposition on employment of social insurance taxes. He should remember that the 2002 OECD study "Taxing Wages" showed that the social contributions in the United Kingdom are significantly lower than those in our major European partners, and they will continue to be so. The very problem that many of our European partners are experiencing is of a social insurance nature and to do with the high cost of their health system.
	In an excellent contribution, my hon. Friend the Member for Dagenham (Jon Cruddas) said clearly that because of the new tax credits, no family with an income of less than £18,000 a year will be worse off. The new tax credit system ensures that lower earners will still have an incentive to take jobs and increase their earnings. Together with the freezing of the income tax personal allowances, the changes allow for a substantial increase in investment in the NHS.
	There are no broken promises. The Government promised not to raise the basic or top rate—[Interruption.]

Mr. Speaker: Order. Many conversations are taking place in the Chamber. The Minister is addressing the House, and she should be heard.

Dawn Primarolo: The Government said that there would not be a rise in the basic or top rates of income tax, and that the NHS would be rebuilt after decades of neglect. No promises have been broken.
	Given the provisions that are set out in the Bill and the scale of the funding that is being directed to the NHS—from £65 billion this year to £105 billion in 2007–08—we can show that all the resources being raised by the increase in national insurance contributions are being directed to the NHS.
	A few points were made about the quality of the health service, especially in Scotland. Questions were asked and observations were made, particularly about spending in Scotland on health care. In-patient waiting lists are about 8 per cent. higher in England than in Scotland. On average, people in Scotland have been waiting for admission for more than a month less than in England. Each year, there are about 10,000 more operations per thousand of the population in Scotland than there are in England. Investment is needed throughout the NHS in England, Wales, Northern Ireland and Scotland, but the clear reforms and the clear investment that the Government are making prove that the NHS can work.
	There have been comments about the imposition of 1 per cent. and the likely effects on employers. Raising money through the national insurance system ensures that we spread evenly the burden of the increased raising of tax. We have never disputed that. It is not true, as some sought to assert, that because of the national insurance changes, employers would seek to reduce pension contributions, for example, or to move away from particular pension funds.
	Commentators are already suggesting that employers should increase contributions into pension funds because such contributions, unlike pay, are not liable to national insurance contributions. When we consider the benefits to employers of a healthy labour force, of reductions in costs for ill health, of low inflation, of low tax and of a high-growth economy, we can see that Britain is still a good place in which to be an employer. It is a climate that ensures that employers can continue to grow.
	Comments have been made about the need to increase the number of care homes. Care homes and the care of the elderly stand to gain from higher NHS and social service spending. Increased resources for social services will include payments for more places for people who need that care. Personal social services spending is to increase by 6 per cent. in real terms.
	The Bill will increase the amount of finance that goes into the NHS. It is a service that is valued and respected by our communities, even if it is not by the Conservatives. The Bill will ensure that the reforms take place and that the money is in place to ensure that we have a first-class health service for the people of this country. Investment must match reforms. We must have accountability. Money must go to front-line staff and primary care trusts to ensure that there is developing and improving care.
	As my hon. Friends made clear throughout this evening's debate, this is a long-term strategy to put right the long-term problems in the national health service. It is a long march—no one is expecting immediate results—but with the finances and reforms provided in the Bill, at least this Government will be keeping their election promises and delivering a first-class health service.

Question put, That the amendment be made:—
	The House divided: Ayes 134, Noes 357.

Question accordingly negatived.
	Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on second or third reading), and agreed to.
	Bill accordingly read a Second time.

NATIONAL INSURANCE CONTRIBUTIONS BILL (PROGRAMME)

Motion made, and Question put forthwith, pursuant to Order [28 June 2001],
	That the following provisions shall apply to the National Insurance Contributions Bill:

Committal

(1) The Bill shall be committed to a Committee of the whole House.

Programming of proceedings

(2) Proceedings in Committee of the whole House and all remaining proceedings on the Bill may be programmed.

Proceedings in Committee, on consideration and on Third Reading

(3) Notwithstanding the practice of the House as to the intervals between stages of Bills brought in on Ways and Means Resolutions, proceedings in Committee of the whole House, any proceedings on consideration and proceedings on Third Reading shall be completed in one day.
	(4) Proceedings in Committee of the whole House shall (so far as not previously concluded) be brought to a conclusion at half past Eight o'clock on that day.
	(5) Any proceedings on consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at Ten o'clock on that day.

Programming Committee

(6) Sessional Order B (programming committees) made on 28th June 2001 shall not apply to proceedings in Committee of the whole House or on consideration and Third Reading.—[Dan Norris.]
	Question agreed to.

EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

Execution of Orders Freezing Assets Or Evidence

That this House takes note of European Union Document no. 6980/02, draft Framework Decision on the execution in the European Union of orders freezing property or evidence; shares the Government's view that the general thrust of the measure will improve the speed and effectiveness with which assets and evidence can be secured in cases of serious crime; acknowledges the amendments which have been included, largely at the Government's instigation, to ensure that personal rights and freedoms are protected as far as is possible; and supports the Government's position on this measure.—[Dan Norris.]
	Question agreed to.

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 18(1)(a) (Consideration of draft deregulation, etc., orders),

Housing

That the draft Regulatory Reform (Housing Assistance) (England and Wales) Order 2002, which was laid before this House on 17th April, be approved.—[Dan Norris.]
	Question agreed to.
	Motion made, and Question put forthwith, pursuant to Standing Order No. 18(1)(a) (Consideration of draft deregulation, etc., orders),

Regulatory Reform

That the draft Regulatory Reform (Carer's Allowance) Order 2002, which was laid before this House on 22nd April, be approved.—[Dan Norris.]
	Question agreed to.

DEREGULATION AND REGULATORY REFORM

Ordered,
	That John Cryer be discharged from the Select Committee on Deregulation and Regulatory Reform.—[Dan Norris.]

BUSINESS OF THE HOUSE

Patrick McLoughlin: On a point of order, Mr. Speaker. I draw your attention to motion 7, which is about to be put to the House. You will see that the first two paragraphs, with which we have no problem whatever, refer to tomorrow's proceedings. However, paragraph 3 refers to proceedings next Friday, whereby the Government are attempting to reduce the amount of time for the motion on the Adjournment of the House.
	May I ask you, Mr. Speaker, to use your powers on complicated questions? In 1888, the Speaker said that a complicated question can be divided if each part is capable of standing on its own. Clearly, paragraph 3 of the motion can stand by itself, and I therefore ask you to put the question on paragraphs 1 and 2 separately from paragraph 3, to which I shall object.

Mr. Speaker: I take it that the hon. Gentleman is speaking on behalf of the official Opposition and so is saying that paragraphs 1 and 2 of the motion have the agreement of the official Opposition. In that case, I ask the Whip to move paragraphs 1 and 2 together, and the House can then vote on those paragraphs. We can take the third paragraph separately, because I accept the hon. Gentleman's point that that paragraph can stand on its own.
	Ordered,
	That—
	(1) at the sitting on Tuesday 14th May, the Speaker shall put the Questions necessary to dispose of proceedings on the Motions in the name of Mr. Robin Cook and Mr. Stephen Twigg relating to the Modernisation of the House of Commons, to Select Committees, Payment for Chairmen, Tax Law Rewrite, Joint Committee on Statutory Instruments, Liaison Committee: Power to take Evidence, Regulatory Reform and Power to Exchange Papers with Devolved Legislatures not later than four hours after the commencement of proceedings on the first such Motion, and such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved; the Questions may be decided, though opposed, after the expiration of the time for opposed business and the Order [28th June 2001] relating to deferred Divisions shall not apply to them;
	(2) at the sitting on Tuesday 14th May, the Motion in the name of Mr. Robin Cook relating to Code of Conduct may be proceeded with, though opposed, until any hour, and the Order [28th June 2001] relating to deferred Divisions shall not apply to Questions on the Motion or on any Amendments proposed to it; and:—[Dan Norris.]
	Motion made,
	That—
	(3) at the sitting on Friday 24th May, proceedings on the Motion for the adjournment of the House in the name of the Prime Minister relating to matters to be considered before the forthcoming adjournment may continue for three hours, not including any time taken on Questions, statements or personal explanations made pursuant to paragraph (4) of Standing Order No. 11 (Friday sittings), and the Motion shall then lapse.—[Dan Norris.]

Patrick McLoughlin: Object.

PETITIONS
	 — 
	Accommodation Centre (Bicester)

Tony Baldry: I am pleased to be able to present to the House a petition signed by more than 10,000 of my constituents from the town of Bicester and the surrounding villages, which declares:
	That they object to the proposal by the Home Office to build an accommodation centre for asylum seekers on land vacated by the Ministry of Defence and they want the Secretary of State for Transport, Local Government and the Regions to exercise his discretion to ensure that there is a public inquiry.
	That such a public inquiry should provide proper opportunity for the providers of local services, elected representatives of local communities and local people themselves to give evidence to be heard on the merits of any such proposal.
	And your Petitioners, as in duty bound, will ever pray.
	To lie upon the Table.

Burford School Transport

David Cameron: I beg leave of the House to present a petition on behalf of Mrs. Mullis and parents of children travelling to school by bus from Bampton to Burford school in west Oxfordshire. The petitioners are concerned that from 8 April this year, children from Bampton have been travelling on a double-decker bus instead of a traditional school coach. The bus is supposed to carry more than 100 children. It is unsupervised except by the driver and it does not include seat belts. The petitioners are concerned about safety and supervision. There are 251 signatures to the petition.
	The petitioners therefore request:
	That the House of Commons takes note of their petition and of the concerns about the safety of children travelling on double-decker buses to school.
	And your Petitioners, as in duty bound, will ever pray.
	To lie upon the table.

Accommodation Centre (Bicester)

John Bercow: I wish to present a petition requesting a public inquiry into any proposal to site an accommodation centre for asylum seekers near Bicester. I speak on behalf of no fewer than 324 constituents.
	The petition states:
	The petitioners request that the House of Commons urges the Secretary of State for Transport, Local Government and the Regions to exercise his discretion to ensure that in respect of any proposal by the Home Office to site an accommodation centre for asylum seekers on land vacated by the Ministry of Defence on the outskirts of Bicester there be a Full Public Enquiry.
	That such Public Enquiry provide proper opportunity for the providers of local services, elected representatives of local communities and local people themselves to give evidence and be heard on the merits of any such proposal.
	And that the Secretary of State in determining any dispute or differences between the Home Office and Cherwell District Council in respect of any application for such an accommodation centre, should, pursuant to the arrangement set out in Part 4 of the Memorandum attached to the DoE circular 18/84, exercise his discretion to ensure and facilitate a Public Enquiry.
	And the petitioners remain, etcetera.
	To lie upon the Table.

MARIE CURIE CANCER CARE

Motion made, and Question proposed, That this House do now adjourn.—[Dan Norris.]

Lady Hermon: First, I should like to thank you most sincerely for giving me an opportunity through an Adjournment debate to raise the serious funding concerns of Marie Curie Cancer Care and other voluntary hospices. I declare an interest because even after my election to the House last June, I could not bear to break my links with Marie Curie Cancer Care in Northern Ireland and chose, therefore, to remain as the unpaid chairman of its North Down support group.
	In my absence, I have a committee of ever cheerful volunteers who continue to work enthusiastically as fundraisers for Marie Curie Cancer Care, and I am proud of the people of North Down, who continue to give generous support to their fundraising efforts.
	I am extremely pleased to see you in the Chair, Mr. Speaker, because I know that you have always taken a keen personal interest in the great good work of Marie Curie Cancer Care, especially in Hunter's Hill, which is in your constituency and one of only two Marie Curie centres in Scotland—the other is in Edinburgh.
	You are, Mr. Speaker, widely recognised as a loyal and active supporter of the hospice in your constituency, and in its silver anniversary year, your generosity in offering to host a reception in Speaker's House is greatly appreciated by Marie Curie. Hunter's Hill is regarded as a centre of excellence in specialist palliative care, but most regrettably, financial constraints mean that its full complement of 41 beds cannot be used.
	Beyond Scotland, there are eight other Marie Curie centres throughout the rest of the United Kingdom—one in Wales at Penarth, six located around England at Newcastle, Liverpool, Bradford, Solihull, north London and Caterham in Surrey. Last, but certainly not least, there is one centre in Northern Ireland. The Marie Curie centre in Belfast was formerly known as Beaconfield. Again, it regrettably now functions with only 19 beds providing specialist palliative care.
	We need to raise approximately £3 million for capital investment in an extension and we would obviously welcome Government support for that. In addition to the 19 beds in the Belfast centre, approximately 700 patients are cared for each year in their own homes by Marie Curie nurses across Northern Ireland. All staff make a wonderful commitment.
	I want to pay warm tribute to the staff in the 10 centres as well as those Marie Curie nurses who cared for some 17,000 cancer sufferers at home in 2000–01. Their selfless dedication and compassion give tremendous comfort and support to those with cancer and their families. In that context, I should like to quote briefly from a letter that I received from a constituent, Mrs. Yvonne Mortlock, who described the last days of her father's life in the Marie Curie centre at Caterham. She wrote:
	"The building was a haven of peace, kindness, love and compassion, which wrapped itself around one when entering the building. It was all so tranquil.
	The nursing care was superb, so professionally administered it looked easy. But what was also so admirable were the love and care shown to the close relatives of the patient."
	Mrs. Mortlock concluded:
	"I commend this Government to pledge itself to support in whatever way is possible the tremendous work the Marie Curie charity has done, is doing and hopefully will be able to continue to do in the future. Without question it is a deserving organisation."
	Mrs. Mortlock's plea is echoed by many Members of the House, and I am sure that the Minister will be well aware of early-day motion 1081, entitled "Hospice Funding", which has already been signed by 133 Members.
	I should like the Minister to address two key questions tonight. First, are the Government supporting, in whatever way possible, the tremendous work of Marie Curie Cancer Care, as my constituent has requested? Secondly, are the Government supporting other voluntary hospices around the country? Sadly, the figures suggest that the answer to both those questions is no. Despite the fact that voluntary hospices provide three quarters of palliative care, the NHS contribution to voluntary hospices has dropped from 35 to 28 per cent. of annual running costs. This 7 per cent. drop has occurred since the Labour Government came to power in 1997.
	The main reason for the fall has been that inflation uplifts to the voluntary sector have not kept pace with the voluntary hospices' increasing costs. For example, the Government have—quite rightly, I must say—made significant improvements to the salaries of NHS doctors, nurses and other staff. That, of course, means that voluntary hospices have no choice but to match the increases for their staff, without whom they could not function.
	Moreover, the increase in employers' national insurance contributions announced in the recent Budget will mean that Marie Curie Cancer Care will need to find considerable funds to keep its 10 hospices running and to pay for its nursing service. I look forward to what I hope will be a guarantee from the Minister that the additional funding raised by the Budget for substantial investment in the NHS will also be extended to increase public funding to Marie Curie and other voluntary hospices that will have to bear the additional burden of increased national insurance contributions.
	Another way in which hospices such as Hunter's Hill are severely penalised is through VAT. In the last financial year alone, Marie Curie paid £1.4 million in irrecoverable VAT. That is a huge amount of money. The amount of VAT that is being paid by hospices generally is not widely recognised. Surely it is time, therefore, that the Government gave active consideration to making voluntary hospices exempt from VAT.
	In fairness to the Minister, however, I must say how delighted I was—I mean that truly—that, last Friday, 10 May, the Government announced that they were taking action to tackle the inconsistencies in the current system, in which some NHS trusts charge hospices for providing support services, such as NHS ambulances, pathology, imaging and pharmacy services, while others provide them free.
	In their NHS cancer plan, issued as long ago as September 2000, the Government made a commitment that by 2004 an additional £50 million would be made available to the NHS for investment in hospices and specialist palliative care. I would welcome clarification from the Minister as to exactly how and where that £50 million will be spent. Does she agree that, in light of the 7 per cent. drop in NHS contributions to hospices since 1997, £50 million may not now be sufficient? We all know that cancer has no respect for class, sex, colour, creed or any other status. Instead, it is a frightening fact that one in three people will get this awful disease, and that one in four will die from it. Looking around the Chamber and quickly totting up how many Members are here, that is a frightening statistic.
	Hospices that care for terminally ill cancer patients have widespread public support from many, many thousands of volunteers who not only raise funds, but give of their time voluntarily in the hospices. I suggest that the Government must not risk losing the confidence of the general public or of those volunteers. Instead, they must give a firm commitment to developing a proper funding relationship with voluntary hospices as part of the forthcoming spending review. Like my constituent, Mrs. Mortlock, I commend the Government to pledge themselves to support, in whatever way possible, the tremendous work of Marie Curie.

Hazel Blears: I am happy to congratulate the hon. Member for North Down (Lady Hermon) on securing this important debate on hospices, specialist palliative care and, in particular, the excellent work of Marie Curie Cancer Care, which she highlighted. Policy responsibility for cancer services in Northern Ireland rests with the Assembly, so I am able to speak on those issues only as they affect England. However, I trust that what I have to say will interest Members, whichever part of the United Kingdom they represent.
	The hon. Lady set out the success of the hospice movement clearly, passionately and in human terms. I hope that she accepts that this country is at the forefront internationally of standards in palliative care. I am the first to recognise that the hospice movement first showed that such care is possible and that patients, families and carers can be supported through illness and death, as well as during bereavement through counselling.
	It surprised me to learn just how recent are the developments in palliative care. Only in the 1960s through dogged persistence, careful research, tireless fundraising and skilful lobbying did the hospice movement help others to see that such care was not only possible, but at the heart of excellent practice. Therefore, those health care developments are relatively recent.
	The hon. Lady eloquently set out the important and valuable work that Marie Curie Cancer Care does to provide comprehensive care to people with cancer and their families throughout the UK. I am pleased to have the opportunity to acknowledge its work and to thank it for the way in which, over the years, it has worked constructively in partnership with the Department of Health. This certainly is not an example of the voluntary sector going along one track and the Department taking another. We constantly learn from each other in developing services for people in the community.
	On the development of specialist palliative care, the hon. Lady asks how we shall help hospices throughout the country to provide a good standard of service. She will recognise that problems are associated not just with the diversity of palliative care, but with the massive regional inequalities in access to such care.
	A survey conducted in 2000 by the National Council for Hospice and Specialist Palliative Care Services on behalf of the Department showed dramatic variations between regions: only 38 per cent. of health authorities in London had full palliative care strategies, whereas 92 per cent. in the west midlands were already well on the way to developing far-reaching palliative care strategies. In-patient provision varied across regions and there were similar variations in day care, home care and hospital support services. That is not good enough, and we are committed to trying to tackle those inequalities so that people throughout the country, wherever they live, can rely on good-quality palliative care services.
	Inevitably, services that have developed from the voluntary sector depend to some extent on the ability, charisma and passion of individuals to take forward their fundraising programmes. That results in patchy service across the country. That is why the NHS cancer plan, which we published in September 2000, set out our intention to invest an additional £50 million in specialist palliative care by 2004. For the first time, NHS investment in this area nationally will match that of the voluntary sector, so there will be parity of funding.
	It is true that merely increasing investment will not necessarily address the inequality of provision. That is why we have put in place other measures to try to tackle these issues. We have commissioned the National Institute for Clinical Excellence to undertake an evidence-based review of palliative care services as part of the supportive and palliative care service guidance. Initial findings are likely to be available later in the summer, and they will contribute to the strategy that we are developing as part of the overarching cancer plan. That will enable us, for the first time, to develop standards, so that people will know exactly what service is on offer and whether there is consistency and parity across services.
	We have instituted a series of cancer networks, each of which has a palliative care strategy. Part of that strategy is to consider current population, the needs of a local area and how to build a service for cancer patients at community level involving primary care, secondary care, tertiary care and palliative care. We now have comprehensive data on the map of palliative care provision across England. That will enable more realistic support for voluntary hospices, and will help hospices to plan their own care, so that they can fit in with the network and collaborate with a whole range of professionals—clinicians, nurses and community support workers.
	We recognise the importance of ensuring that the needs of voluntary sector providers are fully reflected in the investment plans that are developed, so as to ensure that we get maximum value from the extra £50 million. We have made central funding available to the national council to support people working in the voluntary sector and enable them to have a real input into the development of local plans. We do not want the plans to be a top-down mechanism. They should be based on the experience of local communities, and should build on the work, knowledge and expertise that voluntary sector providers have acquired over the many years they have been involved in this area.
	We also want voluntary sector providers to have a role in helping to shape the standards that will be developed through the work of NICE, because learning from their experience will be key to ensuring that standards are relevant to the needs of the people who will access the services.
	The role of primary care trusts will be significant for palliative care, because they will spend 75 per cent. of the NHS budget by 2004. We have issued national guidance on the new arrangements for primary care trusts for this year's planning process, including the specific role of cancer networks. We have said that all primary care trusts should use the networks' service delivery plans to commission cancer services for their localities. That should ensure that there is proper planning, so that services do not spring up as a result of local initiatives that are unable to provide an equitable service for people across the community. Proper resources together with proper, detailed planning based on local people's experience should give us a much more coherent provision of cancer services and palliative care services than we have had in the past.
	The hon. Lady raised some specific issues about hospice funding. I understand her concern that the sector should be adequately funded. Estimates by the national council show that total expenditure on adult palliative care services is about £300 million, of which about £170 million is provided by the voluntary sector and £130 million by the NHS. When the £50 million extra investment for the NHS comes through in 2004, funding from the voluntary sector and the NHS should be broadly equal. At a local level, that investment must be based on the agreed plans for palliative care provision within each of the cancer networks' plans.
	According to the figures that the hon. Lady produced, it appears that NHS funding for the hospice movement—the proportionate funding, not the absolute funding—has fallen in recent times. The voluntary sector has been able to increase its fundraising by about 22 per cent. and NHS funding has gone up by about 14 per cent. Clearly, it is not matching the 22 per cent. increase by the voluntary sector. Therefore, proportionately, the figure will go down, but the absolute increase in cash terms has been about 14 per cent. over the past two years. Therefore, real funding for the sector is going up.
	I congratulate the voluntary sector on being able to raise funds at a faster rate than the NHS. That does not mean that NHS funding is going down, but clearly the proportion will be less than the proportion of voluntary sector funding, which is increasing at quite a dramatic rate. I am delighted that local communities and individuals want to contribute voluntarily to the excellent fundraising of Marie Curie and a range of different cancer charities. As I said, this does not mean that the NHS contribution is falling, but it is not rising as fast as the voluntary sector contribution.
	I say that not to blind anyone with figures and statistics, but to show that the Government are just as committed to putting money into the sector. However, we have not been able to do so as fast as the voluntary sector. That does not mean that the hon. Lady and her colleagues should not continue to press Government on the issue because it is obviously an important area for investment.
	The hon. Lady has raised a couple of issues about VAT, about which officials at the Department of Health are in close contact with Customs and Excise. I understand that they will shortly be making a report to the Under–Secretary, my hon. Friend the Member for Pontefract and Castleford (Yvette Cooper), to see whether any relief can be provided in relation to VAT.
	We would expect the NHS to take the recently announced increases in employers' national insurance contributions into account when deciding the level of funding for hospices. Clearly, they are a key part of the calculation. Hospices have wage bills to pay, and we would expect those bills to be part of the calculation when primary care trusts decide the level of funding.
	The hon. Lady generously drew attention to last week's announcement about several issues that were anomalous in the sector, including funding for training posts in hospices, the cost of drugs, pathology and ambulance transport. I am delighted to confirm that from 1 April this year funding for the full basic salary costs of specialist registrars in palliative care training in voluntary hospices will be met centrally through the medical and dental education levy. Therefore, they will be on exactly the same terms as they are in any other sector. The hospice movement will not have to find those extra costs.
	We will be communicating with chief executives of trusts to ensure that their policy on pharmacy, pathology, imaging and ambulance services is consistent across the country, because there are variations at the moment. In some places, there are extra costs; in some places, there are not. NHS patients in hospices should get the free pathology and imaging tests and services that NHS patients in any other settings get, and patients should not be charged for transport by ambulance between hospice, hospital and home. We will be reminding chief executives that fully agreed pharmacy costs for hospices should be met by the NHS. I am pleased to say that we agree that NHS patients should have access to those services and that hospices should not have to bear those extra costs.
	The close partnership to which I referred between the NHS and the voluntary sector enables us to provide some of the best palliative care services in the world. I recognise that people want us to do even more and to ensure that people across the country are able to get access to care not just in hospices but, importantly, at home, which is a rapidly developing sector. That is why in the NHS cancer plan we said that we would make an extra £50 million available. It is also why we take cancer itself so seriously. A massive amount of new investment is going into not just treating cancer, but cancer research, which is an important area.
	Government investment in cancer research in the past year has been estimated at £190 million. Charities themselves found £180 million in the same year. Those are quite significant and substantial sums, and they are a recognition of the tragic cost to families, individuals and their carers caused by cancer in our community. The stark figures provided by the hon. Lady at the end of her speech brought that home to us.
	As well as the extra investment, there is a massive programme of updating equipment. We are putting in more MRI scanners and linear accelerators. We are trying to bring our equipment up to the best standards that would be expected in any other country.
	I am delighted to say that more than 95 per cent. of patients referred urgently with suspected cancer were seen within two weeks during October to December 2001, the last period for which we have figures. We are beginning to get on top of this matter, although we can do much more to make sure that we catch the disease as early as possible.
	An extra 85,000 women have been screened this year in the first phase of the extension of the NHS breast screening programme to women aged 65 to 70. Much more screening, detection and early diagnosis are taking place, and there is much more work on research and, crucially, prevention. One of our top targets was to try to get more people to give up smoking as a contribution to reducing cancer. Over the last 18 months, more than 118,000 people have reported that they have successfully given up smoking using the Government's world-class services to help people to quit.
	We have a good programme right across the field in tackling cancer. The hon. Lady is right to raise the important issue of specialist palliative care, which is a relatively new field of health care that has been developed over the last 30 to 40 years. The people involved are some of the most impressive nurses, clinicians and community support workers whom I have ever met. I have visited hospices, and the words of the hon. Lady's constituent—that these places are a "haven of peace" that wrap themselves around people at a difficult time in their lives, and when they are at their most vulnerable—were appropriate. The services that I have seen are absolutely first rate and first class.
	The task for the Government and the community is to make sure that these services are not simply available where there have been enthusiastic volunteers and that, as a national health service, we have a responsibility to people right across the community to make sure that they can have access to care at home or in a hospice, as well as support for their families and carers. The service must be designed around the needs of the patients who use it.
	That is why I genuinely feel that the cancer networks and the collaboratives—local people working together with patients, talking about their needs and the services they would like to see—should be driving not just cancer services, but the whole of our national health service. Patients and the public fund our services, through fundraising or taxes, and our responsibility is to make sure that those services are the very best that we can possibly provide.
	I am delighted that the hon. Lady has had the opportunity to raise the subject today. I reassure her that the Government certainly value these services and that we will do our very best to make sure that the new investment gets to them and makes a difference on the ground.
	Question put and agreed to.
	Adjourned accordingly at seven minutes to Eleven o'clock.